What transfer fee is required for an Exit Realty Upper Midwest franchise transfer?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
| l. EXIT Realty Upper Midwest’s approval of transfer by Franchisee | 18 | EXIT Realty Upper Midwest has the right to approve all transfers but will not unreasonably withhold approval. |
|---|---|---|
| m. Conditions for EXIT Realty Upper Midwest approval of transfer | 18 | New Franchisee qualifies, transfer fee (10% of the then current initial franchise fee, not to exceed 25% of the Initial Franchise fee paid) paid, purchase agreement approved, training arranged, Assignment signed and current Franchise Agreement signed by new Franchisor or Franchisee (also see the non-competition section below). |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 27–31)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, a franchisee transferring an Exit Realty Upper Midwest franchise must pay a transfer fee. This fee is calculated as 10% of the then-current initial franchise fee. However, the transfer fee will not exceed 25% of the initial franchise fee that the franchisee originally paid.
In practical terms, this means that if the initial franchise fee has increased since the franchisee first purchased the franchise, the transfer fee will be based on the higher, current fee, but capped at 25% of what the franchisee initially paid. This protects the franchisee from potentially exorbitant transfer fees if the initial franchise fee has significantly increased over time.
For a prospective Exit franchisee, it's important to understand how the transfer fee is calculated, especially if they anticipate selling their franchise in the future. They should also consider that fees are subject to change by Exit, as noted in Item 17 regarding modifications of the agreement. Therefore, it is essential to review the most current Franchise Disclosure Document and Franchise Agreement for the most up-to-date information on transfer fees and other obligations.