What was the reduction of franchise fees arising from restructuring of related notes payable for Exit as of December 31, 2023?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
| Cash paid during the year for: | |||
|---|---|---|---|
| Cash paid during the year for interest | $ 49,502 | $ 74,777 | $ 90,746 |
| Deferred rent reclassified as operating lease | |||
| --- | --- | --- | --- |
| right-of-use assets | $ - | $ - | $ 69,213 |
| Leasehold improvement allowances reclassified as | |||
| --- | --- | --- | --- |
| operating lease right-of-use asset | $ - | $ - | $ 189,111 |
| Operating lease liability arising from recognition of | |||
| --- | --- | --- | --- |
| right-of-use asset | $ - | $ - | $ 428,236 |
| Unrealized holding gains (losses) on investments included | |||
| --- | --- | --- | --- |
| in accumulated other comprehensive income (loss) | $ 5,568 | $ 7,017 | $ (9,239) |
| Accounts receivable applied to notes payable | $ - | $ - | $ 10,100 |
| Acquisition of franchise territory right renewals financed | |||
| --- | --- | --- | --- |
| with notes payable | $ - | $ 287,044 | $ - |
| Reduction of franchise fees arising from restructuring | |||
| of related notes payable | $ - | $ 1,275,185 | $ - |
| Proceeds from sales of available-for-sale securities | |||
| --- | --- | --- | --- |
| reinvested | $ 1,307 | $ 1,380 | $ - |
| Reclassification adjustment for net losses included in | |||
| net losses | $ - | $ 425 | $ - |
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the reduction of franchise fees arising from the restructuring of related notes payable was $1,275,185 as of December 31, 2023. This reduction is part of a larger set of financial activities that include advances, debt reduction, and restructuring related to franchise territories. These territories include Illinois, Minnesota, Wisconsin, and Michigan.
Specifically, the restructuring and reduction in franchise fees were part of a negotiation with Exit Realty Corp. International to amend outstanding notes associated with franchise territories renewed on September 10, 2023. This restructuring impacted the balance of franchise territory debt for Illinois, Minnesota, Wisconsin, and Michigan.
For a prospective Exit franchisee, this indicates that the company has been actively managing its financial obligations and restructuring debt to improve its financial position. The significant reduction in franchise fees through restructuring suggests that Exit is willing to work with its franchisees to ensure their financial viability. However, it's important for potential franchisees to understand the terms of these restructurings and how they might impact their own financial obligations and the overall financial health of the franchise system.