How does EXIT Realty define control over another company?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
EXIT Realty Pacific West, LLC is a subsidiary of EXIT Realty Corp. USA that was incorporated in 2020. The Company is deemed to control another company either by ownership of a majority voting interest in the other company's equity or by incurring a contractual obligation to provide additional financial support to the other company. The Company owns a majority of the voting interest of EXIT Realty Pacific West, LLC.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit Realty's 2025 Franchise Disclosure Document, the company defines control over another company in two ways. First, Exit is deemed to control another company through ownership of a majority voting interest in the other company's equity. This means that if Exit owns more than 50% of the voting shares of another company, it is considered to control that company.
Second, Exit's control can be established by incurring a contractual obligation to provide additional financial support to the other company. This implies that even without majority ownership, if Exit is legally bound to provide financial assistance to another company, it is considered to have control over it.
This definition is important for prospective franchisees as it clarifies the scope of Exit Realty Corp. International's consolidated financial statements and its relationships with subsidiaries. Understanding these control mechanisms helps franchisees assess the financial stability and operational structure of the Exit franchise system.