What is the deadline for an Exit franchisee to tender the defense of an action to the Subfranchisor after receiving service of the pleadings or Summons and Complaint?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee is named as a defendant or party in any action involving the Proprietary Marks or System and if Franchisee is named as a defendant or party solely because the plaintiff or claimant is alleging that Franchisee does not have the right to use the Proprietary Marks or System, then Franchisee shall tender the defense of the action to Subfranchisor and Subfranchisor or EXIT will defend Franchisee in the action provided Franchisee has tendered the action to Subfranchisor within seven (7) days after receiving service of the pleadings or the Summons and Complaint involving the action.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, if a franchisee is named in a legal action involving the Proprietary Marks or System, and the claim alleges the franchisee lacks the right to use them, the franchisee must tender the defense of the action to the subfranchisor. To be eligible for defense by the Subfranchisor or Exit, the franchisee must tender the action within seven days of receiving service of the pleadings or the Summons and Complaint.
This requirement means an Exit franchisee must act quickly upon receiving legal documents to ensure they can receive support from the subfranchisor or Exit in defending against the claim. Failure to meet the seven-day deadline could result in the franchisee being solely responsible for their legal defense.
This provision is designed to protect Exit's brand and system by ensuring that legal challenges to the use of its proprietary marks are handled promptly and consistently. It also provides a defined timeframe for the franchisee to take action, promoting clarity and accountability in the legal process.