In the event of the death or permanent disability of an Exit franchisee, what is the maximum time allowed to complete the transfer of the franchise interest?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon the death or permanent disability of Franchisee, if an individual, or of a guarantor of this Agreement, this Agreement, or guarantor's interest in the entity that owns or controls this Agreement, may be transferred or bequeathed by Franchisee or guarantor or his or her estate to any designated person or beneficiary approved by Subfranchisor. However, the transfer to the designee or beneficiary will be subject to the applicable provisions of Section 18.3 of this Agreement. The disposition shall be completed within a reasonable time, not to exceed nine (9) months from the date of the death or permanent disability. Failure to so transfer the interest within the nine (9) month period shall constitute a breach of this Agreement.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, in the event of the death or permanent disability of a franchisee, the franchise agreement may be transferred or bequeathed to a designated person or beneficiary approved by the subfranchisor. This transfer is subject to the standard transfer provisions outlined in Section 18.3 of the agreement.
The timeframe allowed for completing this transfer is a "reasonable time", but it cannot exceed nine months from the date of death or permanent disability. Failure to complete the transfer within this nine-month period constitutes a breach of the franchise agreement.
This provision ensures that in unfortunate circumstances, the Exit franchise can continue operating under new, approved management, providing a degree of business continuity. However, the estate or designee must act quickly to meet all transfer requirements and secure subfranchisor approval within the specified timeframe to avoid breaching the agreement.