Which sections of the Exit franchise agreement and disclosure document detail the franchisee's fee obligations?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
igations in these agreements and in other items of this Disclosure Document.**
| Obligation | Section in Franchise Agreement | ITEM in Disclosure Document |
|---|---|---|
| a. Site Selection and Lease | 3 | 11 |
| b. Pre-opening Purchases/Leases | 3 | 5, 6, 7 |
| c. Site Development and other Pre-opening Requirements | 3 | 5, 6, 7 |
| d. Initial and Ongoing Training | 9 | 11 |
| e. Opening | 4 | 11 |
| f. Fees | 5, 6, 7 | 5, 6, 7 |
| g. Compliance with Standards and Policies/Operating Manual | 10 | 11 |
| h. Trademark and Proprietary Information | 8 | 13, 14 |
| i. Restrictions on Products/Services Offered | 9 | 16 |
| j. Warranty and Customer Service Requirements | 9.2 | 11 |
| k. Territorial Development and Sales Quotas | 9 | 12 |
| l. Ongoing Product/Service Purchases | 9.10 | 8 |
| m. Maintenance, Appearance and Remodeling Requirements | 3 | 7 |
| n. Insurance | 9 | 7 |
| o. Advertising | 7, 9 | 6, 11 |
| p. Indemnification | 31 | Not Applicable |
| q. Owner’s Participation/Management/Staffing | 9 | 15 |
| r. Records/Reports | 9,11 | 11 |
| s. Inspections/Audits | 9,11 | 6,11 |
| t. Transfer | 18 | 6, 17 |
| u. Renewal | 5 | 17 |
| v. Post-termination Obligations | 17 | 17 |
| w. Noncompetition Covenants | 21 | 17 |
| x. Dispute Resolution | 25 | 17 |
ITEM 10 FINANCING
We do not offer direct or indirect financing. EXIT and EXIT Realty Upper Midwest do not guarantee your note, lease or any other financial obligation you may enter into in connection with your business.
ITEM 11 FRANCHISOR'S AND SUBFRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING
Except as listed below, EXIT and EXIT Realty Upper Midwest are not required to provide you with any assistance.
1. Pre-Opening Obligations.
Before you open your Franchise, EXIT Realty Upper Midwest and EXIT will provide the following assistance to you:
(1) Provide you with a copy of our prototypical office plans and specifications, which you may adapt for your own use. See Franchise Agreement, Sections 9.11(a) and 12.1.
(2) Provide you with access to EXIT's computer software. See Franchise Agreement, Section 9.14.
(3) Provide you with one (1) copy of the Training Manual Vol. 1 Franchise Onboarding Manual that covers EXIT's operating policies, marketing and advertising policies and standards, promotional programs and other matters. The Table of Contents of the Franchise Onboarding Manual is attached to this Disclosure Document as Exhibit C. See Franchise Agreement, Section 12.1. If EXIT's next scheduled training program is offered prior to your office opening, you must attend that program. Otherwise, you must attend the next scheduled training program. EXIT's initial training program is offered twice a year. Some or all of the training may be done online.
(4) You must select your office site, subject to EXIT Realty Upper Midwest's review and consent, and secure fee or leasehold title for the site. Generally, office sites that are leased are not owned by EXIT Realty Upper Midwest. EXIT Realty Upper Midwest may consult with you regarding site selection, but you are ultimately responsible for locating and obtaining an acceptable site. In evaluating a proposed site, EXIT Realty Upper Midwest considers such factors as competition and market analysis, proximity to other real estate offices and other potential sources of customers, building suitability, traffic and transportation, the nature and extent of adjacent businesses, the comparative advantages of a particular market, and other factors selected by EXIT Realty Upper Midwest. Your office site must be within your Protected Territory (see Item 12 below). See Franchise Agreement, Section 3.1(A).
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 18–19)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, several sections outline the franchisee's fee obligations. Item 6 of the disclosure document and Sections 5, 6, and 7 of the franchise agreement contain information regarding fees. The fee structure is also outlined in the Exit Formula, which is part of the franchise agreement. Specifically, Section 7.6 of the Franchise Agreement discusses the allocation of fees generated from each sale or lease transaction to advertising and other funds. These advertising fees are further allocated to the United States Creative Fund, United States Promotional Fund, and Regional Development Fund.
Item 23 of the disclosure document also discusses fees, particularly in the context of revenue recognition. It mentions initial and renewal fees, commissions, transaction fees, and sponsorship revenue. The initial fee is paid upon execution of the agreement and is non-refundable. Continuing fees are paid according to the Exit Formula. Franchisees are also responsible for company development fees, transaction fees, and regional development fees when closing transactions through Exit's proprietary system, MEMO.
Prospective franchisees should carefully review these sections to understand the full scope of their fee obligations, including initial fees, continuing fees, advertising fees, and other potential charges. Understanding how these fees are calculated, when they are due, and how they are used is crucial for assessing the financial viability of the franchise. Additionally, franchisees should inquire about any potential changes to the fee structure and how those changes might impact their business.