What is the role of the Subfranchisor in the Exit franchise system?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
12. OBLIGATIONS OF SUBFRANCHISOR
12.1. Initial Obligations
Prior to the opening of the franchise business, Subfranchisor will make available to Franchisee, one (1) copy of Training Manual, together with any amendments to the manual. The manual will include standard operating procedures and quality control directives designed to familiarize Franchisee with the System and better enable it to run an efficient office. The manual will also include requirements governing the use and specification of all logos, trademarks and other sales promotional materials.
12.2. Continuing Obligations
(A) During the operation of the franchise business, Subfranchisor shall make available to Franchisee, upon request, consulting services relating to the operation of its real estate services business as Subfranchisor deems appropriate and necessary, upon such terms and conditions as the parties may agree.
(B) Subfranchisor shall encourage the use of the EXIT real estate services on an international basis by members of the public.
(C) Subfranchisor shall maintain reasonable supervision over Franchisee as often as Subfranchisor shall deem necessary, to assure compliance with the System and any supplemental quality control standards as established by EXIT and Subfranchisor from time to time, and to provide guidance in the management and operations of Franchisee's office.
(D) Subfranchisor shall make available to Franchisee, the System's operating procedures, directives, and standards relating to signs, letterheads, sales promotions, office designs and other similar materials to the extent and in the manner that such materials are made available to it by EXIT or as are approved by EXIT.
(E) Subfranchisor shall limit the offering of EXIT Realty Corp. franchises to persons or entities who possess a valid real estate broker's license.
(F) In the event Subfranchisor's interest in this Agreement expires or is terminated by EXIT, for whatever reason, Subfranchisor's interest in this Agreement shall transfer to EXIT. Thereafter, EXIT or its Assignee, shall assume Subfranchisor's obligations under this Agreement.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the subfranchisor plays a crucial role in supporting and supervising franchisees within the Exit system. The subfranchisor is responsible for providing franchisees with a copy of the training manual, including standard operating procedures and quality control directives, to help them run their offices efficiently. This initial obligation ensures that franchisees are well-versed in the Exit system from the outset.
During the operation of the franchise, the Exit subfranchisor continues to offer consulting services to franchisees as deemed necessary, under terms and conditions agreed upon by both parties. They also encourage the use of Exit real estate services internationally. A key aspect of the subfranchisor's role is to maintain reasonable supervision over franchisees to ensure compliance with the Exit system and quality control standards, providing guidance in the management and operations of the franchisee's office.
Furthermore, the Exit subfranchisor makes available to franchisees the system's operating procedures, standards for promotional materials, and office designs, as provided by Exit. They also ensure that only individuals with a valid real estate broker's license are offered Exit Realty Corp. franchises. In the event that the subfranchisor's agreement with Exit expires or is terminated, their interest in the agreement transfers to Exit, which will then assume the subfranchisor's obligations. This multi-faceted role highlights the subfranchisor's importance in maintaining the integrity and standards of the Exit franchise system.