What is the required action for Exit Subfranchisors regarding the geographical boundaries of the Exit territory?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
| 1. | The following information is deemed a part of the EXIT Realty Corp. Franchise Agreement between Subfranchisor and the party identified below dated [date from page 1 of franchise agreement], 20 | |
|---|---|---|
| 2. | The name of this territory is | |
| 3. | The grid population for this territory type grid (Rural/low/medium or high density. Please indicate) | is making this a |
| 4. | The minimum office space requirement shall be: | |
| a) | ||
| Rural density – | ||
| 750 | ||
| square feet | ||
| b) | ||
| Low density – | ||
| 1,000 square feet | ||
| c) | ||
| Medium density – | ||
| 1,500 square feet | ||
| d) | ||
| High density – | ||
| 2,000 square feet | ||
| 5. | The geographical boundaries of the Territory are as indicated on the map attached to this page. The | |
| Territory is further described as follows: | ||
| [COMPLETE | DESCRIPTION | |
| THE | IN | |
| GEOGRAPHICAL | DETAIL | |
| INCLUDE A MAP OF THE PROTECTED TERRITORY] | AND |
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the geographical boundaries of the territory are indicated on a map attached to a receipt. The territory is further described in detail, and this description should be completed and include a map of the protected territory.
Exit grants the franchisee the right to operate a real estate brokerage office within a specific geographic area, referred to as the "Protected Territory," which is outlined in Schedule 3 of the agreement. This right is conditional upon the franchisee maintaining a valid real estate broker's license, not defaulting on the agreement, and the agreement not being terminated or abandoned. As long as the franchisee is not in breach of the agreement, neither Exit nor the subfranchisor will establish another real estate service franchise or Exit-owned real estate service office within the Protected Territory using the Proprietary Marks.
However, the franchisee is not prohibited from listing and selling property or representing clients outside the Protected Territory, and other Exit franchisees may list and sell property or represent clients domiciled in the Protected Territory. To maintain the protected status of the territory, the franchisee must comply with all terms of the agreement, including maintaining a specified minimum number of affiliated associate brokers and sales representatives who possess valid real estate licenses for the state where the territory is located.
If a franchisee fails to correct an alleged breach of the agreement within the specified time after receiving written notice from the subfranchisor, the subfranchisor has the right to terminate the territorial exclusivity of the Protected Territory or reduce its size. This action does not prevent the subfranchisor from seeking other remedies against the franchisee under state or federal laws or the agreement, including recovery of attorneys' fees, punitive damages, and injunctive relief.