According to Exit, who determines if a business is competitive with Exit or an Exit Franchise?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee agrees that, during the term of this Agreement and all renewals and extensions of this Agreement, and after termination, expiration, or non-renewal of this Agreement, Franchisee shall hold all Confidential Information that is not a Trade Secret in strictest confidence, shall not use or disclose such Confidential Information (except in the performance of this Agreement), shall diligently protect any and all Confidential Information against loss by inadvertent or unauthorized disclosure, and shall comply with guidelines established by EXIT and Subfranchisor for the purpose of protecting the information.
21. FRANCHISEE'S COVENANTS NOT TO COMPETE
21.1. In-Term Covenant Not to Compete
Franchisee and Franchisee's shareholders, partners, members, directors, officers and guarantors of this Agreement will not, during the term of this Agreement and all renewals and extensions of this Agreement, on their own account or as an employee, agent, consultant, partner, officer, director or shareholder of any other person, firm, entity, partnership or corporation, own, operate, lease, franchise, conduct, engage in, be connected with, have any interest in or assist any person or entity engaged in any real estate business, or
other related business that is in any way competitive with or similar to the business conducted by EXIT or EXIT subfranchises or franchises, nor offer products or services that are offered by EXIT.
21.2. Post-Term Covenants
Franchisee and Franchisee's shareholders, partners, members, directors, officers and guarantors of this Agreement will not, for a period of one (1) year following the termination, assignment or expiration of this Agreement on their own account or as an employee, agent, consultant, partner, officer, director or shareholder of any other person, firm, entity, limited liability company, partnership or corporation, directly or indirectly,
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to the 2025 FDD, the franchisee agrees not to engage in any real estate business or related business that is in any way competitive with or similar to the business conducted by Exit or Exit subfranchises or franchises, nor offer products or services that are offered by Exit. This restriction is in place during the term of the agreement and all renewals and extensions.
This means that during the term of the agreement, the franchisee cannot be involved with any business that competes with Exit. The determination of what constitutes a competitive business is not explicitly defined in this section, but it is implied that Exit has the authority to determine what is considered competitive.
After the agreement terminates, the franchisee is restricted from competitive activities for one year. The FDD does not specify who determines whether a business is competitive with Exit after termination of the agreement.