Who determines the changes needed to distinguish the franchisee's operations from Exit after termination?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
(D) Franchisee shall immediately distinguish its operations from that of EXIT, Subfranchisor, and of EXIT Affiliates so as to avoid every possibility of any confusion to the public.
(E) Franchisee, at its expense, shall make or cause to be made such changes in signs, telephone numbers, buildings or structures as EXIT or Subfranchisor may direct in order to distinguish Franchisee effectively from its former appearance and from other EXIT Affiliates.
The changes shall include a complete change in the trade name from that under which Franchisee conducted its business while affiliated with the System.
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, upon termination of the franchise agreement, the franchisee must immediately distinguish their operations from Exit, its subfranchisor, and Exit affiliates to avoid public confusion. Exit or its subfranchisor directs the specific changes a franchisee must make to signs, telephone numbers, buildings, or structures to differentiate themselves effectively. These changes include adopting a completely different trade name from the one used while affiliated with the Exit system.
If the franchisee fails to make these required changes within ten days of the request, the subfranchisor has the right to enter the premises and make the changes at the franchisee's expense, without liability. The franchisee is then responsible for paying these expenses upon demand. This ensures that the Exit brand and system remain protected and that customers are not misled after a franchise agreement ends.
This requirement protects Exit's brand identity and goodwill. It is a fairly standard practice in franchising to ensure that terminated franchisees do not continue to operate in a way that could be mistaken for the original franchise, which could damage the brand's reputation and create customer confusion. Prospective franchisees should be aware of these post-termination obligations, as they can involve significant costs and operational changes.