Does Exit Realty Upper Midwest have to approve the purchase agreement as a condition of transfer?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
| y Upper Midwest has the right to approve all transfers but will not unreasonably withhold approval. | ||
|---|---|---|
| m. Conditions for EXIT Realty Upper Midwest approval of transfer | 18 | New Franchisee qualifies, transfer fee (10% of the then current initial franchise fee, not to exceed 25% of the Initial Franchise fee paid) paid, purchase agreement approved, training arranged, Assignment signed and current Franchise Agreement signed by new Franchisor |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 27–31)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, Exit Realty Upper Midwest's approval of the purchase agreement is required as a condition for the transfer of a franchise. Specifically, the FDD outlines several conditions that must be met for Exit Realty Upper Midwest to approve a transfer.
These conditions include ensuring the new franchisee meets the qualification standards set by Exit, payment of a transfer fee, approval of the purchase agreement, arrangement of training for the new franchisee, and the signing of an assignment and a current franchise agreement by the new franchisor or franchisee. The transfer fee is calculated as 10% of the then-current initial franchise fee, but it will not exceed 25% of the initial franchise fee originally paid by the franchisee.
While Exit Realty Upper Midwest has the right to approve all transfers, the FDD states that such approval will not be unreasonably withheld. This suggests that as long as the outlined conditions are met and the proposed transferee is qualified, Exit is likely to approve the transfer. Prospective franchisees should carefully review these conditions and understand the associated costs and requirements to ensure a smooth transfer process.