What is the consequence if an Exit franchisee fails to make the required changes to distinguish their operations after termination?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee shall, upon request, fail or omit to make or cause to be made the changes within ten (10) days, then Subfranchisor shall have the right to enter upon the premises, without liability, and make, or cause to be made, the changes at the expense of Franchisee, which expenses shall be paid by Franchisee upon demand.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, if a franchisee fails to make the necessary changes to distinguish their operations from Exit after termination within ten days of the request, the subfranchisor has the right to enter the premises and make the changes themselves. This is done without liability to the subfranchisor.
The franchisee is then responsible for paying the expenses incurred by the subfranchisor for making these changes. The franchisee must pay these expenses upon demand.
This provision ensures that terminated Exit franchisees do not continue to operate in a way that could confuse the public or infringe on Exit's brand and trademarks. It protects Exit's brand identity and goodwill by ensuring a clear separation between the terminated franchise and the ongoing Exit operations. This is a fairly standard clause in franchise agreements, as franchisors need to protect their brand and avoid customer confusion after a franchise agreement ends.