Besides owning or operating a competing real estate business, what other activities are Franchisee and Franchisee's shareholders, partners, members, directors, officers and guarantors prohibited from doing that is competitive with Exit during the term of the agreement?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, during the term of the agreement, franchisees and related parties are restricted from engaging in activities that compete with Exit. In addition to not owning or operating a competing real estate business, they cannot be an employee, agent, consultant, partner, officer, director, or shareholder of any entity involved in other related businesses that are competitive with or similar to Exit or its subfranchises or franchises. They are also prohibited from offering products or services that Exit offers. This extends to the franchisee's shareholders, partners, members, directors, officers, and guarantors.
This non-compete clause ensures that franchisees and their related parties remain fully committed to the Exit franchise and do not divert resources or expertise to competing ventures. The clause aims to protect Exit's market position and prevent franchisees from leveraging Exit's resources and knowledge to benefit competitors.
The Exit franchise agreement specifies that violating the in-term covenant not to compete is grounds for termination of the agreement, without the possibility of correcting the breach. This underscores the importance Exit places on preventing competition from its franchisees and related parties during the term of the agreement.