For the Exit Beneficiary Program, what happens to the Sponsoring Bonuses if an individual beneficiary has been designated, upon the death of the beneficiary?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 23: RECEIPT]
- a) Sponsors may select a beneficiary to receive the Sponsoring Bonuses upon the death of the Sponsor. Beneficiary designation shall be in writing on documentation supplied or approved by EXIT and must be delivered to EXIT prior to the Sponsor's death. The designated beneficiary may be an individual, or a trust. The Sponsoring Bonuses shall end upon the death of the Sponsor if a beneficiary has not been designated. If an individual beneficiary has been designated, the Sponsoring Bonuses shall end upon the death of the beneficiary.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, if a sponsor in the Exit system designates an individual as a beneficiary to receive Sponsoring Bonuses, those bonuses will cease upon the death of the designated beneficiary. This is part of Exit's Beneficiary Program, which allows sponsors to pass on their bonus income.
This provision means that the benefit is not indefinite. The Sponsoring Bonuses are designed to provide income to either the sponsor or, for a limited time, to their beneficiary. It is important for potential Exit franchisees to understand that the Sponsoring Bonuses are not an inheritable asset in perpetuity. The designation must be made in writing using Exit-approved documentation before the sponsor's death.
For a prospective franchisee, this highlights the importance of succession planning and understanding the limitations of the Beneficiary Program. While it offers a way to provide for a beneficiary after the sponsor's death, the income stream is not permanent. Franchisees should consider this when making long-term financial plans and discussing the business with potential heirs or beneficiaries.