Does the Exit Realty Upper Midwest franchise have any litigation that requires disclosure in Item 3 of the FDD?

According to Exit's 2025 Franchise Disclosure Document, Exit Realty Upper Midwest has no litigation that requires disclosure in Item 3. However, the document does disclose several litigations involving Exit Realty Corp. International, the franchisor. These include cases related to alleged commission disputes, breach of contract, robocalls from a former franchisee, and alleged conspiracies related to real estate brokerage services.

Specifically, Bruce Evans v. Christy Dwyer, EXIT Realty Lake Country, EXIT Realty Corp. International, et al., involved a claim for $88,344 in commissions, which was dismissed against Exit as part of a settlement on September 30, 2024, though Exit continues to pursue indemnity claims against its franchisee. Another case, 71353 Newfoundland & Labrador Inc. and Baushape Design, Inc. v. EXIT Realty Corp. International, involves a claim for $2,500,000 in damages and $975,000 pursuant to a guarantee, with Exit filing a counterclaim for $1,278,090.55. Additionally, Gregory Wallerstein v. EXIT Realty Corp. International is a class action suit related to robocalls from a former franchisee, where the plaintiff seeks to hold Exit vicariously liable.

Furthermore, Exit Realty Corp. International is involved in two class action lawsuits: Kevin McFall v. Canadian Real Estate Association et. al., which alleges a conspiracy related to buyer brokerage services, and Don Gibson, et al., v. National Association of Realtors, et al., which alleges anti-competitive restraints in the real estate industry. These cases involve unspecified amounts of damages and are still pending. While these lawsuits do not directly involve Exit Realty Upper Midwest, they could have implications for the entire Exit franchise system, including its subfranchisors.

Prospective franchisees should be aware of these ongoing litigations involving the franchisor, Exit Realty Corp. International, as they could potentially affect the brand's reputation and financial stability. It is advisable to discuss these matters with Exit and seek legal counsel to fully understand the potential risks and implications before investing in an Exit franchise.