With what covenants must the manager of an Exit franchise conform?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
Your business must be directly supervised "on premises" by a manager who has successfully completed EXIT's training programs. The on-premises manager cannot have an interest or business relationship with any of EXIT's competitors. The manager need not have an ownership interest in your corporate or partnership Franchise. The manager must sign a written agreement to maintain confidentiality of the proprietary information described in ITEM 14 and to conform with the covenants not to compete described in ITEM 17 of this Disclosure Document.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 27)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the on-premises manager of an Exit franchise must sign a written agreement to maintain the confidentiality of proprietary information, as detailed in Item 14 of the FDD. Additionally, the manager must conform to the covenants not to compete, which are described in Item 17 of the FDD.
This means that the manager is legally bound to protect Exit's confidential business information and is restricted from engaging in activities that would compete with the Exit franchise. These restrictions are typical in franchising to protect the brand and the franchisor's business model.
Prospective franchisees should carefully review Items 14 and 17 of the FDD to fully understand the scope of the confidentiality and non-compete obligations for their on-premises manager. Understanding these obligations is crucial for ensuring compliance and avoiding potential legal issues.