Regarding the Exit franchise, what kind of competition might a franchisee face?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
population; Medium density – 20,000-50,000 population and Rural density – less than 5,000 population. You receive exclusivity for the location of your office. You will not receive an exclusive Territory for EXIT listings and/or sales. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
Other EXIT franchises may provide real estate services within your Protected Territory. No compensation is paid to you by us or EXIT for real estate sales by other EXIT franchises within your Protected Territory. Similarly, you may sell real estate services outside of your Protected Territory. There are no restrictions on either you or any other EXIT Franchisee from providing real estate services outside a Protected Territory, including no restrictions on your right to use other channels of distribution, such as the internet, telemarketing or direct marketing, to make sales outside the Protected Territory. EXIT, EXIT Realty Upper Midwest and other EXIT Realty Franchisees reserve the right to use other channels of distribution, including the internet, within the Protected Territory, using EXIT's principal trademarks or using different trademarks. Your exclusivity within the Protected Territory relates only to your operation of an EXIT office within the Protected Territory. The Franchise Agreement provides that EXIT Realty Upper Midwest may not establish either a company-owned or franchised outlet, in the Protected Territory, selling the same goods or similar goods or services under the same or similar trademarks or service marks during the term of the Franchise Agreement, unless you are in default under the terms of the Franchise
Agreement. Your exclusive rights to a Protected Territory may be terminated or modified by EXIT Realty Upper Midwest if you fail to comply with the terms and conditions of the Franchise Agreement. In addition, the exclusive area rights will terminate, and you will be in default under your Franchise Agreement and your Franchise Agreement may be terminated, if you fail to attain and retain the prescribed number of Sales Representatives within the designated period of time. There are no other circumstances that permit EXIT Realty Upper Midwest to modify your territorial rights. The number of Sales Representatives to be maintained is based on the active Realtor® population in the geographic territory that includes the Protected Territory and based upon market conditions and area competition. There is no formula to determine the minimum number of Sales Representatives to be maintained in a Protected Territory. Once the location of the Protected Territory is determined and EXIT Realty Upper Midwest analyzes the active Realtor® population, market conditions and area competition in and around the Protected Territory, the minimum number of Sales Representatives is determined by EXIT Realty Upper Midwest and provided to you not less than 7 calendar days prior to your execution of the Franchise Agreement. See Section 9.8 of the Franchise Agreement.
Source: Item 12 — TERRITORY (FDD pages 24–25)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, an Exit franchisee may face competition from several sources. While franchisees are granted an exclusive territory for the location of their office, they do not receive an exclusive territory for Exit listings or sales. This means that an Exit franchisee could face competition from other franchisees, from outlets that Exit owns, or from other competitive brands that Exit controls.
Specifically, other Exit franchises are allowed to provide real estate services within a franchisee's protected territory. Exit does not provide compensation to a franchisee for real estate sales made by other Exit franchises within their territory. Additionally, there are no restrictions preventing Exit franchisees from providing real estate services outside of their protected territory. Exit and other Exit Realty franchisees can also use various channels of distribution, including the internet, within a franchisee's protected territory, using Exit's trademarks or different trademarks.
Furthermore, the number of sales representatives a franchisee must maintain is based on the active Realtor population, market conditions, and area competition within and around the protected territory. The minimum number of sales representatives is determined by Exit Realty Upper Midwest and provided to the franchisee not less than 7 calendar days before the Franchise Agreement is executed. The minimum number of sales representatives varies depending on the territory size. For example, a franchisee in a rural density territory must have a minimum of 3 sales representatives after the 1st year, 5 after the 2nd year, and 7 after the 3rd year and thereafter. A franchisee in a high-density territory must have 10 sales representatives after the 1st year, 20 after the 2nd year, and 30 after the 3rd year and thereafter. Failure to maintain the prescribed number of sales representatives can result in termination of the exclusive area rights and default under the Franchise Agreement.