What was the total amount of revenue recognized by Exit during the year 2023?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Revenues recognized over time: | |||
| Franchise sales and renewals | $ 374,466 | $ 432,411 | $ 431,299 |
| Regional development rights and | |||
| renewals | 493,549 | 946,819 | 496,281 |
| Annual membership fees | 4,579,962 | 4,750,812 | 5,048,225 |
| Software and training fees | 1,642,339 | 1,643,027 | 1,710,816 |
| Ancillary revenue | 443,377 | 453,825 | 532,289 |
| Revenues recognized at a point in time: | |||
| Convention income | 912,823 | 750,324 | 1,114,051 |
| Transaction and development fees | 6,974,711 | 6,981,403 | 8,395,365 |
| Other miscellaneous income | - | 33,171 | 130,067 |
| $ 15,421,227 | $ 15,991,792 | $ 17,858,393 |
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the total revenue recognized in 2023 was $15,991,792. This revenue is categorized into amounts recognized over time and at a point in time. Revenues recognized over time include franchise sales and renewals ($432,411), regional development rights and renewals ($946,819), annual membership fees ($4,750,812), software and training fees ($1,643,027), and ancillary revenue ($453,825). Revenues recognized at a point in time include convention income ($750,324), transaction and development fees ($6,981,403), and other miscellaneous income ($33,171).
For a prospective Exit franchisee, understanding the different revenue streams is crucial. The consistent revenue from annual membership fees and transaction fees suggests a stable income base, while convention income can fluctuate. The document also mentions that the company restated its 2023 financial statements due to incorrectly accounted receivables for advertising costs, which resulted in underreported accounts receivable and overreported advertising costs. This restatement indicates the importance of accurate financial reporting and may warrant further investigation into the company's accounting practices.
It is important to note that these figures represent the revenue recognized by Exit itself and not the potential earnings of an individual franchisee. Franchisee earnings would depend on factors such as location, market conditions, and the franchisee's operational efficiency. The FDD also details how fees generated from sales or lease transactions are allocated to various funds administered by Exit, including charitable, creative, advertising, regional development, and administrative funds. Franchisees should understand how these funds are used and the extent of Exit's discretion over them.
Prospective franchisees should carefully review the entire Item 23 of the FDD, along with the accompanying notes, to gain a comprehensive understanding of Exit's revenue recognition policies and financial performance. Consulting with a financial advisor is also recommended to assess the financial viability of investing in an Exit franchise.