What is the abandonment period that triggers termination without cure for an Exit franchise?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
- (ii) Franchisee voluntarily abandons the franchise by failing to operate the franchise in accordance with the terms of this Agreement, within the Protected Territory for a period of ten (10) consecutive days, or for twenty (20) days in any period of thirty (30) consecutive days, unless such failure is due to fire, flood, earthquake or similar cause beyond Franchisee's control.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, a franchisee can have their agreement terminated without the opportunity to cure the default if they voluntarily abandon the franchise. Abandonment is defined as failing to operate the franchise within the protected territory for either ten consecutive days or for twenty days within any thirty-day period. However, this abandonment clause does not apply if the failure to operate is due to events outside of the franchisee's control, such as a fire, flood, or earthquake.
This provision means that an Exit franchisee must maintain consistent operation of their franchise. Extended closures, even if unintentional, could lead to termination of the franchise agreement if they fall outside the exceptions listed.
It is important to note the difference between a short-term closure and a longer period of abandonment. While a short, temporary closure might be permissible, exceeding the ten or twenty-day limits triggers the 'no cure' termination clause. This is a stricter standard than many franchise agreements, which often allow a cure period for operational defaults. Prospective franchisees should carefully consider their ability to maintain consistent operations before investing in an Exit franchise.