When are transaction fees and development fee income earned, recognized, and payable by Exit franchisees?

According to Exit's 2025 Franchise Disclosure Document, transaction fees and development fee income are earned, recognized, and payable by Exit franchisees upon the finalization of a transaction initiated by the franchisee, specifically a sale or leasing transaction. This means that Exit franchisees are responsible for paying these fees to Exit as soon as a deal closes.

For transaction fees, every sales or leasing transaction involves two sides: a selling side and a buying side. Each transaction side is subject to transaction fees, which are payable to Exit immediately upon the finalization of each transaction. The amount of the transaction fee varies depending on the gross commission earned by the franchisee. For example, transaction sides generating a gross commission between $250.01 and $2,500 incur a $50 fee, while those between $2,500.01 and $5,000 incur a $150 fee. Higher commission brackets are subject to fees of $225 or $300.

In addition to transaction fees, Exit franchisees also pay regional development fees. Each transaction side is subject to a regional development fee of $35, payable to Exit immediately upon the finalization of each transaction. However, transactions generating a gross commission of $2,500 or less are not subject to this regional development fee. The maximum regional development fees paid per calendar year per sales representative is $500, pro-rated in the first calendar year.

Furthermore, franchisees also pay a company development fee of 10% of the first $100,000 of gross commissions per calendar year earned by each sales representative, with a maximum fee of $10,000 per sales representative per year, pro-rated in the first calendar year. This fee is paid at the finalization of each transaction side via electronic funds transfer and deposited into a designated trust account by Exit upon receipt. Commissions of $250 or less are not subject to company development fees. These fees are crucial for franchisees to understand as they directly impact their earnings and cash flow.