What was the reduction of franchise fees arising from restructuring of related notes payable for Exit franchisees in the year ending December 31, 2023?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
| December 31, 2022 | ||||
|---|---|---|---|---|
| Available-for-sale | ||||
| Thrivent | $ 60,913 | $ 102 | $ (9,341) | $ 51,674 |
| Balance before | Debt | Balance after | ||
| Restructure | Advances | Reduction | Restructure | |
| Franchise territory – IL | $ 702,045 | $ 277,019 | $ (606,327) | $ 372,737 |
| Franchise territory – MN | 60,106 | 127,745 | (17,430) | 170,421 |
| Franchise territory – WI | 467,232 | 70,518 | (192,906) | 344,844 |
| Franchise territory – MI | 1,088,526 | 46,973 | (458,523) | 676,976 |
| Total | $ 2,317,909 | $ 522,255 December 31 | $ (1,275,185) | $ 1,564,978 |
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, during the year ending December 31, 2023, Exit restructured notes payable owed to Exit Realty Corp. International. This restructuring resulted in a debt reduction of $1,275,185 related to franchise territories. The debt reduction impacted several territories including Illinois, Minnesota, Wisconsin and Michigan.
Specifically, the franchise territory in Illinois saw a debt reduction of $606,327. The franchise territory in Minnesota experienced a debt reduction of $17,430. The franchise territory in Wisconsin had a debt reduction of $192,906, and the franchise territory in Michigan saw a debt reduction of $458,523.
This restructuring of notes payable and the resulting debt reduction could be seen as a positive sign for Exit franchisees in those territories, as it reduced their financial obligations. However, prospective franchisees should investigate the specific terms of these restructurings and how they might impact their individual franchise agreements. Understanding the reasons behind the initial debt and the implications of the restructuring is crucial for assessing the financial health and stability of an Exit franchise.