What constitutes 'Permanent Disability' or being 'Permanently Disabled' for an Exit franchisee?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
- (J) Permanent Disability or Permanently Disabled: "Permanent Disability" or "Permanently Disabled" means a mental or physical disability which precludes the individual from performing material and substantial duties of his or her employment, as reasonably determined by Subfranchisor.
Payment of benefits for Permanent Disability under a disability insurance policy shall be conclusive as to the existence of the Permanent Disability, although such payments are not required in order to establish Permanent Disability for purposes of this Agreement.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, 'Permanent Disability' or being 'Permanently Disabled' is defined as a mental or physical disability that prevents an individual from performing the essential duties of their employment. The determination of whether a franchisee is permanently disabled is made reasonably by the Subfranchisor.
Notably, the FDD states that if a franchisee receives disability insurance benefits for Permanent Disability, this will be considered conclusive evidence of the disability. However, receiving such payments is not a prerequisite for establishing Permanent Disability under the terms of the Franchise Agreement. This means that even without disability insurance payments, a franchisee can still be considered Permanently Disabled if the Subfranchisor reasonably determines that their mental or physical condition prevents them from fulfilling their job duties.
In the event of a franchisee's permanent disability, Exit's Franchise Agreement, or the guarantor's interest in the entity that owns or controls the agreement, may be transferred or bequeathed to a designated person or beneficiary approved by the Subfranchisor. This transfer must be completed within nine months of the date of the permanent disability. Failure to transfer the interest within this period constitutes a breach of the agreement. This provision ensures business continuity while providing a mechanism for the disabled franchisee (or their estate) to transfer their interest in the franchise.