What are the restrictions on suppliers for Exit (Item 8) and how do they relate to the franchisee's pre-opening purchases/leases (Item 9)?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
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ITEM 8 RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES
You must purchase all stationery, merchandising material and/or anything else that is utilized by you that contains EXIT's logo and/or Marks from EXIT's Approved Suppliers or Suppliers that sign a Confidentiality and License Agreement with EXIT. EXIT, through its Affiliate, Ah$um America, Inc., maintains a list of Approved Suppliers. If you wish to have a supplier designated as "Approved," you may submit information about the supplier and its relevant products or services to Ah$um America, Inc. for review. Ah$um America, Inc. will not unreasonably withhold its approval of any supplier that meets the quality standards set forth in the EXIT Training Manual and agrees to sign Ah$um America, Inc.'s then current Terms and Conditions document for Approved Suppliers. Ah$um America, Inc. will notify you of its decision within 60 days of your submission. Ah$um America, Inc. reserves the right to re-inspect the products or services of any Approved Supplier and revoke its approval if the service or product fails to meet the quality standards set forth in the EXIT Training Manual. Ah$um America, Inc. will send written notice of any revocation to the Approved Supplier. Ah$um America does not impose a fee or cost for Supplier approval.
Ah$um America, Inc. applies the following general criteria in approving a proposed Supplier:
- (a) Ability to make Product in conformity with EXIT's specifications;
- (b) Production, supply considerations and delivery capability;
- (c) Reputation and integrity of Supplier;
- (d) Financial condition and insurance coverage of Supplier.
Approved Suppliers are sent written notice of any modifications in EXIT quality standards.
EXIT is the only approved supplier for certain computer software for the Franchise report system known as MEMO. You must purchase a compatible computer for the Franchise MEMO system. The computer requirements are described in ITEM 11. The MEMO system has been developed and will be licensed by EXIT to you. There is no initial cost for the system. You must pay a monthly license fee of $250.00. If you own more than 1 EXIT Franchise, and those are operated by the same legal entity and use the same trade name, the monthly license fee for the second and subsequent Franchise Agreements shall be reduced to 25% of the monthly license fee charged at the time the subsequent Franchise Agreement(s) is signed.
You must comply with quality standards and specifications described in EXIT's Training Manuals for furnishings, fixtures, equipment and operating supplies.
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, franchisees must purchase specific items from approved suppliers. Specifically, all stationery, merchandising material, and anything else that contains Exit's logo or marks must be purchased from Exit's Approved Suppliers or Suppliers that sign a Confidentiality and License Agreement with Exit. Exit, through its Affiliate, Ah$um America, Inc., maintains a list of Approved Suppliers. If a franchisee wishes to have a supplier designated as "Approved," they can submit information about the supplier and its products/services to Ah$um America, Inc. for review. Ah$um America, Inc. will not unreasonably withhold approval of any supplier that meets the quality standards set forth in the Exit Training Manual and agrees to sign Ah$um America, Inc.'s then current Terms and Conditions document for Approved Suppliers. Ah$um America, Inc. will notify the franchisee of its decision within 60 days of submission and reserves the right to re-inspect the products or services of any Approved Supplier and revoke its approval if the service or product fails to meet the quality standards set forth in the Exit Training Manual.
Exit is the only approved supplier for certain computer software for the Franchise report system known as MEMO. Franchisees must purchase a compatible computer for the Franchise MEMO system, with computer requirements described in Item 11. There is no initial cost for the MEMO system, but there is a monthly license fee of $250.00. If a franchisee owns more than 1 Exit Franchise, and those are operated by the same legal entity and use the same trade name, the monthly license fee for the second and subsequent Franchise Agreements will be reduced to 25% of the monthly license fee charged at the time the subsequent Franchise Agreement(s) is signed.
Item 9 of the FDD outlines the franchisee's obligations, and includes a table that cross-references these obligations with sections in the Franchise Agreement and relevant Items in the Disclosure Document. Specifically, 'Pre-opening Purchases/Leases' are addressed in Section 3 of the Franchise Agreement and Items 5, 6, and 7 of the Disclosure Document. Furthermore, 'Ongoing Product/Service Purchases' are addressed in Section 9.10 of the Franchise Agreement and Item 8 of the Disclosure Document. The FDD estimates that the required purchases are 3.0% to 12.0% of the cost to establish and operate the Exit Franchise, including exterior signs, office supplies, yard signs, and MEMO fees.