Under what condition does Exit charge a late fee, and what is the amount of the late fee?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
| in one or more transfers— transfer fee equal to 10% of the then-current Initial Fee (not to exceed 25% of the Initial Franchise Fee paid). | |||
|---|---|---|---|
| Minor Transfer. Transfer of less than a 50% interest of the Franchise, or less than 50% interest in the equity or voting rights in the entity that owns or controls the Franchise—$500. See Note6 | |||
| Late Fee | 5% of the late payment. | If a payment is more than 30 days late. | Payable by you to EXIT and EXIT Realty Upper Midwest |
| Interest | Past due amounts are subject to interest at the prime interest rate plus 5%, or the highest contract annual percentage rate allowed by applicable law, whichever is less. | Commencing 30 days after payment is late. | Payable by you to EXIT Realty Upper Midwest |
Source: Item 6 — OTHER FEES (FDD pages 13–15)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, a late fee is applied if a payment is more than 30 days late. The late fee is 5% of the late payment. This fee is payable by the franchisee to EXIT and EXIT Realty Upper Midwest.
In addition to the late fee, Exit also charges interest on past due amounts. The interest rate is the prime interest rate plus 5%, or the highest contract annual percentage rate allowed by applicable law, whichever is less. This interest commences 30 days after the payment is late and is payable by the franchisee to EXIT Realty Upper Midwest.
Prospective Exit franchisees should be aware of these late payment penalties and ensure they have sufficient cash flow to make timely payments. Understanding the due dates for all fees and setting up systems to avoid late payments can help franchisees avoid these additional costs. It is also important to note that all fees are subject to change by Exit Realty Upper Midwest or EXIT during the term of the agreement, and memberships and fees may increase by up to 7% annually.