What is the purpose of including the 'State that has issued Broker's License' for Exit?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
and/or representation of clients at any location within the state. Likewise, other EXIT franchisees may list and sell property or represent clients domiciled in the Protected Territory.
- (B) In order to maintain the protected status of the Protected Territory, Franchisee must comply with all of the terms of this Agreement and, in particular, must comply with the provisions of this Agreement regarding maintenance of a specified minimum number of affiliated associate brokers and sales representatives, all of whom must at all times possess either a valid real estate broker's or sales representative's license for the state where the Protected Territory is located (collectively "Sales Representatives" or "Associate Brokers").
2.4. Single Franchise
Franchisee has no option, right of first refusal, or similar right to acquire an EXIT franchise for any other location absent a written agreement with Subfranchisor.
2.5. Franchisee Business
Franchisee shall not directly or indirectly engage in any business or otherwise use the Proprietary Marks or any part of the System for any purpose or in any manner not contemplated in this Agreement, without the prior written consent of Subfranchisor and Franchisor. If Franchisee desires to offer any services other than those services that
are part of the System (e.g., property management services), such services may be offered through a separate legal entity but shall not be offered through Franchisee.
3. INITIAL OFFICE; RELOCATION
3.1. Initial Office
- (A) Franchisee shall cause a Franchise office to be opened and operating within the Protected Territory within a period not to exceed one hundred and twenty (120) calendar days from the date of this Agreement. Franchisee shall select a desired location for its Franchise office or any branch office within its Protected Territory and shall submit the location to Subfranchisor for approval, which approval shall not be unreasonably withheld.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the inclusion of the 'State that has issued Broker's License' is crucial for ensuring legal compliance and maintaining the integrity of real estate transactions within the Exit system. Specifically, the Franchisee must comply with all terms of the agreement and ensure that all affiliated associate brokers and sales representatives possess a valid real estate broker's or sales representative's license for the state where the protected territory is located. This requirement ensures that all individuals operating under the Exit brand are legally authorized to conduct real estate activities in the relevant jurisdiction.
The Franchisee, if operating as a corporation, partnership, or limited liability company, must possess a valid real estate broker's license in the state where the protected territory is located. This is a condition for Exit or the Subfranchisor to provide written consent to the assignment of the Franchise Agreement to such an entity. Furthermore, the sales representatives must maintain a valid real estate broker's or sales representative's license under state law and comply with all national, state, and local laws governing real estate transactions.
Exit [Trade Name] acts as the broker of record on all real estate transactions, ensuring compliance with applicable law and industry standards. Sales Representatives are required to maintain their real estate license with Exit [Trade Name] and comply with all state real estate practice licensing requirements. This coordinated effort ensures that all activities conducted under the Exit name adhere to the necessary legal and ethical standards, protecting both the franchisee and the clients they serve.