Which section of the Exit franchise agreement addresses advertising obligations?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
mum and/or maximum prices at which Franchisees must sell services.
4. Advertising.
From the fees generated from each sale or lease transaction, a portion of the fees is allocated to advertising and to other funds. See ITEM 6 of this Disclosure Document and Section 7.6 of the Franchise Agreement.
Advertising. The advertising fees are allocated to the following Advertising Funds (the "Funds"): United States Creative Fund, United States Promotional Fund and Regional Development Fund.
The United States Creative Fund is used to create concepts and programming used for national and local advertising of EXIT. EXIT uses the creative fund to pay its employees and subcontractors for the advertising services that it provides.
The United States Promotional Fund is used to advertise and promote in radio, television, internet, newspaper, trade magazines and other advertising and promotion mediums.
The Regional Development Fund is used to purchase advertising services within the Region within which the Regional Development Fund fees are generated.
EXIT is not required to spend any amount on advertising in any particular area or Region, except the Regional Development Fund which is used solely for regional development in the Region in which the funds are generated. These funds are intended for the benefit of the EXIT name and the EXIT system, and not necessarily for the direct benefit of any specific franchisee, although it is anticipated that all Franchisees will benefit from increased awareness and visibility of the EXIT name and the EXIT system.
The Advertising Funds may be used to meet all costs of administering, directing, preparing, placing and paying for national, regional or local advertising and promotion.
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 18–19)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, advertising obligations are addressed in Section 7.6 of the Franchise Agreement. Item 11 of the FDD also discusses advertising in general terms.
The FDD specifies that a portion of the fees generated from each sale or lease transaction is allocated to advertising funds. These funds include the United States Creative Fund, the United States Promotional Fund, and the Regional Development Fund. The Creative Fund supports the creation of advertising concepts, the Promotional Fund is used for advertising across various media, and the Regional Development Fund is used for advertising services within the specific region.
Exit does not have an advertising council composed of franchisees to advise on advertising policies, and franchisees do not have the power to form, change, or dissolve such a council. While franchisees can develop their own advertising materials at their own cost, these materials must be approved in advance and in writing by Exit. The Regional Development Fund Fees are used solely to purchase advertising, including billboard advertising, in the Region in which the Regional Development Fund Fees are generated.