What is the role of the 'EXIT Formula' in the Exit Franchise Agreement?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
You may become a Franchisee by entering into a Franchise Agreement with EXIT Realty Upper Midwest, which sets forth your obligations and the obligations of EXIT Realty Upper Midwest. The EXIT Franchise Agreement is attached to this Disclosure Document as Exhibit A-2. EXIT Realty Upper Midwest and you are the only two parties to the Franchise Agreement. The fee structure is outlined in the EXIT Formula (part of the Franchise Agreement).
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, the 'EXIT Formula' is referenced as outlining the fee structure within the Exit Franchise Agreement. The Franchise Agreement itself, which details the obligations of both Exit Realty Upper Midwest (the Subfranchisor) and the franchisee, is included as Exhibit A-2 in the FDD.
For a prospective franchisee, this means that the specific fees they will be required to pay to Exit are determined by the EXIT Formula, which is part of the Franchise Agreement. Understanding this formula is crucial for assessing the financial viability of the franchise. The Franchise Agreement is between the franchisee and EXIT Realty Upper Midwest.
It is important for potential franchisees to carefully review Exhibit A-2 and understand the EXIT Formula to fully grasp the financial obligations and the overall terms of the franchise agreement before entering into the agreement. This includes understanding how fees are calculated, when they are due, and what services or benefits are associated with those fees.