What is the consequence of an unauthorized Transfer of the Exit franchise?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
unauthorized Transfer, whether voluntary, involuntary, by operation of law or otherwise, or any attempt to do so, shall be deemed void and be grounds for termination of this Agreement by Subfranchisor.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, an unauthorized transfer of the franchise is considered void and can lead to termination of the Franchise Agreement by the Subfranchisor. This applies to any transfer attempt, whether voluntary, involuntary, or by operation of law.
This provision underscores the importance Exit places on controlling who operates its franchises. Prospective franchisees should understand that they cannot sell, assign, or transfer their franchise without the Subfranchisor's approval, which involves meeting specific conditions. Failure to comply with these transfer requirements can have serious repercussions, including the loss of the franchise.
The FDD outlines several conditions that must be met to obtain the Subfranchisor's consent for a transfer. These include rectifying any existing defaults, settling all outstanding debts to Exit, the Subfranchisor, and Brokers' Council, and providing comprehensive financial information about the proposed transferee. The transferee must also meet certain character, creditworthiness, and experience standards, and agree to complete the required training. These stipulations are in place to ensure that any new franchisee maintains Exit's standards and is capable of successfully operating the business.