What responsibilities does the Exit Franchisee have?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
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Every Franchise must possess a bonafide real estate broker's license in good standing under the laws of the state where the Franchise is located. Franchisees are expected to provide first class real estate service to the buying and selling public. The Franchisee has the responsibility to hire and recruit real estate sales representatives and to compete in the real estate brokerage business. The number of sales representatives required under a Franchise Agreement is based on the active Realtor® population in the geographic territory that includes your Protected Territory (see ITEM 12 of this Disclosure Document) and based upon market conditions and competition.
EXIT's agents for service of process are disclosed in Exhibit B of this Disclosure Document.
Your activities are subject to state and federal laws and regulations, including, but not limited to, those related to real estate transfer, real estate settlement procedures and real estate brokerage laws.
If the Franchisee is operating as a corporation, partnership or limited liability company, you must comply with the requirements of entity ownership set forth in Section 14 of the Franchise Agreement. Those requirements include:
- (a) You must execute a Personal Guaranty of the Franchise Agreement.
- (b) The Franchisee entity must be legally authorized to do business in the state where your Protected Territory is located.
Source: Item 1 — THE FRANCHISOR AND SUBFRANCHISOR, AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 6–8)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, franchisees have several key responsibilities. A franchisee must possess a bonafide real estate broker's license in good standing under the laws of the state where the franchise is located. Exit franchisees are expected to provide first-class real estate service to the buying and selling public. They are also responsible for hiring and recruiting real estate sales representatives and competing in the real estate brokerage business. The number of sales representatives required is based on the active Realtor population in the geographic territory and market conditions. Franchisees must also comply with federal, state, and local laws related to real estate brokers, employment law matters, the Americans with Disabilities Act, and any other regulations specific to the real estate industry. They must obtain and maintain all necessary licenses and permits required by public authorities.
If the franchisee operates as a corporation, partnership, or limited liability company, they must meet specific entity ownership requirements. These include executing a Personal Guaranty of the Franchise Agreement, ensuring the franchisee entity is legally authorized to do business in the state where the Protected Territory is located, providing Exit Realty Upper Midwest with copies of the entity's organizational documents (such as Articles of Incorporation and Bylaws, Articles of Organization and Operating Agreement, or Partnership Agreement), and providing a copy of any Buy-Sell Agreement between the equity holders of the Franchisee entity.
These responsibilities highlight the importance of understanding the legal and operational requirements of running an Exit franchise. Prospective franchisees should carefully review the Franchise Agreement and consult with legal and business advisors to ensure they can meet these obligations. The competitive nature of the real estate sales business, as noted in the FDD, also means that franchisees must be prepared to compete with other real estate offices in terms of price, service, location, and quality of service.