What pre-opening purchases or leases for an Exit franchise, as mentioned in Item 9, are further detailed in Items 5, 6, and 7?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Expenditure | Amount | Method of | When Due | To Whom | |
|---|---|---|---|---|---|
| Payment | Paid | ||||
| Initial Franchise Fee1 | $7,500 - $25,000 | Lump Sum | When you sign the Franchise Agreement | EXIT Realty Upper Midwest1 | |
| Training Expenses | $2,500-$5,000 | As Incurred | During Training | Airlines, Hotels and Restaurants | |
| Real Property – Leased for | $12,000- | As Billed | Prior to | Landlord | |
| 12 Months2 | $50,000 | Opening | |||
| Insurance3 | $2,000-$10,000 | As Billed | As Incurred | Insurance Company | |
| Equipment, Fixtures, Other Fixed Assets, Construction, Remodeling Leasehold Improvements & Decorating Costs4 | $10,000- $30,000 | As Billed | As Incurred | Vendors, Lessor | |
| Security Deposits, Utility Deposits, Business Licenses & Other Prepaid Expenses5 | $1,500-$5,000 (if applicable) | As Billed | As Incurred | State Authorities | |
| Exterior Office Sign | $500-$5,000 | As Billed | As Incurred | Vendors | |
| Automobile Lease6 | $4,800-$9,000 | As Billed | As Incurred | Vendors | |
| Additional Funds (6 months)7 | $20,000- $70,000 | As Needed | As Incurred | Vendors | |
| Total | $60,800- $209,000 | Note 1 EXIT Realty Upper Midwest retains 75% of the Initial Fee for a Franchise Agreement. EXIT is paid the remaining 25% of the Initial Fee. |
Note 2 You must lease at least 750 square feet for a rural density territory, 1,000 square feet in a low density territory, 1,500 square feet in a medium density territory and 2,000 square feet in a high density territory, in a suitable commercial building for your office. Because real estate values vary dramatically from location to location, we cannot accurately estimate your rent, but annual rental costs typically range from approximately $12.00 to $20.00, or more, per square foot for an office location. This is a gross rental that includes building operating expenses, insurance and real estate taxes. The Sales Representative quota set forth in Section 9.8 of the Franchise Agreement will require the office size to increase within the first 3 years of the lease. We estimate this will increase the annual rent to $36,000-$60,000. Franchise offices are usually located in the commercial center within your Protected Territory.
Note 3 The costs of insurance will vary depending on the number of employees and Sales Representatives, the location of your office and the value of the equipment and improvements.
Note 4 Equipment includes 2-4 computers, the requirements of which are set forth in Section 5 of ITEM 11 of this Disclosure Document. This amount also includes yard signs, sale and sold signs, business cards and office supplies.
Note 5 Includes Association of Realtors®, Local Board Fees and Multiple Listing Service (MLS) Memberships.
Note 6 While not required under the terms of the Franchise Agreement, an individual Franchisee will need an automobile to provide real estate services. The individual may supply his or her own automobile or may cause the business to lease or purchase an automobile. The average monthly lease payment included in this table ranges from $400-$800.
Note 7 This estimate includes legal expenses, staff salaries, utilities and operating expenses for the first 6 months of operation. The estimate includes travel, lodging and incidental expenses for initial training. Tuition is not charged for attendance of approved attendees at initial training. EXIT charges you $500.00, if you sign up and fail to attend the training or cancel on less than 30 days' notice. The estimate does not include an owner's salary or draw. These figures are estimates and will vary by your geographic area; how much you follow our methods and procedures; your management skill, experience and business acumen; the relative effectiveness of your staff; local economic conditions; competition; and the revenue level reached during the initial period. We cannot guarantee that you will not have additional expenses starting the business. This estimate was calculated based upon the average operating expenses of EXIT Franchisees throughout the United States.
Note: None of the above amounts described in this ITEM 7 are refundable from EXIT. Refundability of other amounts will vary, depending on the vendor.
ITEM 8 RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES
You must purchase all stationery, merchandising material and/or anything else that is utilized by you that contains EXIT's logo and/or Marks from EXIT's Approved Suppliers or Suppliers that sign a Confidentiality and License Agreement with EXIT. EXIT, through its Affiliate, Ah$um America, Inc., maintains a list of Approved Suppliers. If you wish to have a supplier designated as "Approved," you may submit information about the supplier and its relevant products or services to Ah$um America, Inc. for review. Ah$um America, Inc. will not unreasonably withhold its approval of any supplier that meets the quality standards set forth in the EXIT Training Manual and agrees to sign Ah$um America, Inc.'s then current Terms and Conditions document for Approved Suppliers. Ah$um America, Inc. will notify you of its decision within 60 days of your submission. Ah$um America, Inc. reserves the right to re-inspect the products or services of any Approved Supplier and revoke its approval if the service or product fails to meet the quality standards set forth in the EXIT Training Manual. Ah$um America, Inc. will send written notice of any revocation to the Approved Supplier. Ah$um America does not impose a fee or cost for Supplier approval.
Ah$um America, Inc. applies the following general criteria in approving a proposed Supplier:
- (a) Ability to make Product in conformity with EXIT's specifications;
- (b) Production, supply considerations and delivery capability;
- (c) Reputation and integrity of Supplier;
- (d) Financial condition and insurance coverage of Supplier.
Approved Suppliers are sent written notice of any modifications in EXIT quality standards.
EXIT is the only approved supplier for certain computer software for the Franchise report system known as MEMO. You must purchase a compatible computer for the Franchise MEMO system. The computer requirements are described in ITEM 11. The MEMO system has been developed and will be licensed by EXIT to you. There is no initial cost for the system. You must pay a monthly license fee of $250.00. If you own more than 1 EXIT Franchise, and those are operated by the same legal entity and use the same trade name, the monthly license fee for the second and subsequent Franchise Agreements shall be reduced to 25% of the monthly license fee charged at the time the subsequent Franchise Agreement(s) is signed.
You must comply with quality standards and specifications described in EXIT's Training Manuals for furnishings, fixtures, equipment and operating supplies.
Approved Suppliers may pay EXIT, through Ah$um America, Inc., a royalty based on sales revenues for each product sold utilizing the EXIT Mark. The amount is negotiated with each approved supplier, as a percentage of revenues or a flat fee, and varies from Supplier to Supplier. Based on the most recent audited financial statements, EXIT, through Ah$um America, Inc., received $246,406.79 in royalties from Approved Suppliers in 2024 and $1,370,925.52 from its MEMO software license and access fees in 2024. The total of these amounts constitutes 6.9% of EXIT's 2024 revenues, which totaled $19,674,709.52. Based on the most recent audited financial statements, EXIT's Affiliates received no revenue from sales to franchisees.
We estimate that the required purchases described above are 3.0% to 12.0% of the cost to establish and operate the EXIT Franchise (this includes the exterior sign(s), office supplies, yard signs and MEMO fees).
Except for the license of the MEMO system, neither EXIT nor its Affiliates are Approved Suppliers, and no officer of EXIT owns an interest in an Approved Supplier. There are no purchasing or distribution cooperatives in existence as of the date of this Disclosure Document. Except for Approved Suppliers, EXIT does not negotiate purchase agreements with suppliers for the benefit of Franchisees. EXIT does not provide benefits to Franchisees based on a Franchisee's purchase of a particular product or service or use of particular suppliers.
ITEM 9 FRANCHISEE'S OBLIGATIONS
This table lists your principal obligations under the Franchise Agreement and other agreements. It will help you find more detailed information about your obligations in these agreements and in other items of this Disclosure Document.
| Obligation | Section in Franchise Agreement | ITEM in Disclosure Document
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, Item 9 outlines the franchisee's obligations, referencing other items in the document for further details. Specifically, pre-opening purchases and leases are listed as being detailed in Items 5, 6, and 7. This means that to understand the full scope of what Exit requires a franchisee to purchase or lease before opening, a prospective franchisee must carefully review those particular items.
Items 5, 6, and 7 likely contain information about required equipment, software, signage, and other essential items necessary to start operating the Exit franchise. These items may also detail the costs associated with these purchases or leases, payment schedules, and whether these must be sourced from approved suppliers. Understanding these pre-opening expenses is crucial for a franchisee to accurately estimate their initial investment and manage their startup budget.
Therefore, a potential Exit franchisee should meticulously examine Items 5, 6, and 7 of the FDD to identify all mandatory pre-opening expenditures. This will enable them to make informed financial decisions and ensure they are adequately prepared for the initial investment required to launch their Exit franchise.