What was the range of monthly rent for Exit's office space in Lakeville, Minnesota?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2023 | 2022 | ||
|---|---|---|---|
| Deferred revenues – beginning of year | $ 253,796 | $ 317,558 | $ 308,853 |
| Additions for initial franchise fees received | 40,000 | 33,750 | 80,000 |
| Additions for renewal fees received | 25,750 | 19,500 | 28,250 |
| Additions for assignment fees received | 10,750 | 8,625 | 18,000 |
| Reduction for amounts deemed uncollectible | - | (10,100) | - |
| Revenue recognized during the year | (106,088) | (115,536) | (117,545) |
| Deferred revenues – end of year | $ 224,208 | $ 253,796 | $ 317,558 |
Upper Midwest Realty, Inc. d.b.a. Exit Realty Upper Midwest 22 Notes to Financial Statements (continued) December 31, 2024, 2023, and 2022
NOTE 6 – CONTRACT BALANCES (continued)
At December 31, 2024, deferred revenues are expected to be recognized as revenue over the remaining term of the associated franchise agreements as follows:
| 2025 | $ | 96,182 | |
|---|---|---|---|
| 2026 | 63,225 | ||
| 2027 | 34,791 | ||
| 2028 | 20,184 | ||
| 2029 | 9,826 | ||
| Total deferred revenues | $ | 224,208 |
NOTE 7 – OPERATING LEASES
The Company entered into a lease agreement commencing April 3, 2017, for office space in Lakeville, Minnesota. The agreement expires on February 29, 2028, and calls for monthly rent ranging from $3,754 to $6,760. In addition to base rent, the Company is charged for its share of operating expenses and taxes. Included in the terms of the lease is a build-out incentive of $322,000. The deferred lease incentive was being amortized over the life of the lease on a straight-line basis. As of January 1, 2022, the remaining unamortized deferred lease incentive of $189,111 was reclassified to operating lease ROU assets as part of the implementation of ASC 842. The deferred lease incentive was fully amortized as of December 31, 2022.
The lease agr
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the company entered into a lease agreement for office space in Lakeville, Minnesota, commencing on April 3, 2017. This lease was set to expire on February 29, 2028, with monthly rent ranging from $3,754 to $6,760.
In addition to the base rent, Exit is also responsible for its share of operating expenses and taxes related to the office space. The initial lease terms included a build-out incentive of $322,000, which was amortized over the lease's life. The remaining unamortized portion of this incentive, amounting to $189,111 as of January 1, 2022, was reclassified to operating lease Right-of-Use (ROU) assets as part of adopting ASC 842. The build-out incentive was fully amortized by December 31, 2022.
The lease agreement also contains provisions allowing the landlord to terminate the lease under specific conditions. These conditions include the premises being rendered wholly untenantable or damaged due to causes not covered by insurance, damage or destruction during the last two lease years, or if the building is significantly damaged (50% or more of the gross leasable area). In any of these events, the landlord can terminate the lease by providing notice to Exit within 120 days of the event. If Exit remains in possession of the premises after the termination date without a new lease, the occupancy will be considered month-to-month, with rent set at 150% of the annual minimum rent, plus percentage rent, and subject to all other original lease conditions.