Under what conditions will Exit Realty Upper Midwest approve a 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, Exit Realty Upper Midwest has the right to approve all franchise transfers, but they will not unreasonably withhold approval. This means that while Exit maintains control over who becomes a franchisee, they can't arbitrarily deny a transfer.
For Exit Realty Upper Midwest to approve a transfer, several conditions must be met. First, the new franchisee must meet Exit's qualification standards, ensuring they are capable of operating the franchise successfully. Second, a transfer fee must be paid. This fee is calculated as 10% of the then-current initial franchise fee, but it will not exceed 25% of the initial franchise fee that the original franchisee paid.
Additional conditions include the approval of the purchase agreement, arrangement of training for the new franchisee, and the signing of an assignment agreement. Furthermore, the new franchisor or franchisee must sign the current Franchise Agreement. These conditions ensure that the transfer process is orderly, that Exit's standards are maintained, and that all parties are legally bound to the terms of the franchise agreement.