Under what circumstances does Exit have the authority to direct or control an agent's actions?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition to the definitions set forth throughout this Agreement, the words and phrases set forth below shall have the following meanings:
- (A) Affiliate: "Affiliate" means any person or entity that directly or indirectly owns or controls the referenced party, that is directly or indirectly owned or controlled by the referenced party, or that is under common control with the referenced party.
The term "control" means the possession, directly or indirectly, of the power to direct or cause the direction, of the management and policies of an entity, whether through ownership of voting securities, by contract or otherwise.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the term "control" is defined as possessing the power to direct or cause the direction of the management and policies of an entity, whether through ownership of voting securities, by contract, or otherwise. This definition is crucial for understanding the relationships and obligations within the Exit franchise system.
Specifically, Exit Realty Corp. International grants subfranchisors the right to license the Exit System and enter into franchise agreements. The sales representatives operate under the supervision of the Exit franchise as independent contractors. These sales representatives must adhere to the minimum standards set by the Exit franchise, ensuring compliance with state laws and maintaining quality control consistent with industry standards.
Furthermore, Exit's subfranchisor maintains reasonable supervision over the franchisee to ensure compliance with the Exit System and any supplemental quality control standards established by Exit. This supervision allows Exit to provide guidance in the management and operations of the franchisee's office, ensuring that the franchisee adheres to the standards and procedures set forth by Exit. This structure ensures that while franchisees have some autonomy, Exit maintains control through its standards, supervision, and the power to enforce compliance.