Are the advances from the ultimate shareholder of Exit secured, and do they bear interest?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
Note 11 Related Party Transactions (Continued)
Advances from the ultimate shareholder of the Company, are unsecured, non-interest bearing and have no fixed terms for repayment.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, advances from the ultimate shareholder are unsecured and non-interest bearing. These advances also do not have fixed terms for repayment.
This arrangement means that Exit is receiving funds from its ultimate shareholder without providing any collateral as security. Should Exit encounter financial difficulties, the shareholder's advances would be treated as general debt, without any special priority for repayment. The absence of interest means that Exit is not incurring any direct cost for the use of these funds, which could be beneficial for managing its cash flow.
The lack of fixed repayment terms provides Exit with flexibility, but it also introduces uncertainty, as the shareholder could demand repayment at any time. A prospective franchisee should consider the potential impact of these related-party transactions on Exit's financial stability and operations.