What is the significance of Section 9.k) in relation to the currency used in the Exit Formula?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
16. Currency
Except as provided in Section 9.k) above, all amounts described in the EXIT Formula are in U.S. Dollars.
- k) Sponsoring Bonuses are calculated and paid out in the currency of the country in which the transaction is finalized.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, Section 9.k) of the Exit Formula is significant because it specifies the currency in which Sponsoring Bonuses are calculated and paid. While the general rule is that all amounts in the Exit Formula are in U.S. Dollars, Section 9.k) provides an exception.
Specifically, Sponsoring Bonuses are calculated and paid out in the currency of the country where the transaction is finalized. This means that if a transaction occurs in Canada, the Sponsoring Bonus will be paid in Canadian dollars, not U.S. dollars. This is an important consideration for potential Exit franchisees, especially those operating in countries outside the United States, as it affects the actual amount of the bonus they receive due to currency exchange rates.
This policy ensures that Exit Associates receive bonuses in a currency that is relevant to their local market, which can simplify financial transactions and reduce the need for currency conversions. However, it also means that the value of the Sponsoring Bonus can fluctuate based on exchange rate changes, introducing an element of financial uncertainty for the franchisee. Therefore, franchisees should monitor exchange rates and factor them into their financial planning.