In the event of a Transfer of an Exit franchise, what happens to the unpaid principal balance of amounts due to Exit, the Subfranchisor, or the Brokers' Council?

According to Exit's 2025 Franchise Disclosure Document, in the event of a transfer of the franchise, the entire unpaid principal balance of all amounts due to Exit, the Subfranchisor, or the Brokers' Council, along with any accrued and unpaid interest, becomes immediately due and payable in full. This means that if a franchisee decides to sell or transfer their Exit franchise to someone else, they must immediately pay off any outstanding debts they owe to Exit, the subfranchisor, or the Brokers' Council, including any interest that has accumulated. This immediate payment is required without any further notice or demand from Exit, the Subfranchisor, or the Brokers' Council.

This provision protects Exit, the subfranchisor, and the Brokers' Council by ensuring that all outstanding financial obligations are settled when a franchise changes hands. It prevents the new franchisee from inheriting the previous franchisee's debt and ensures a clean financial break between the two parties. For a prospective franchisee, this highlights the importance of maintaining good financial standing and carefully planning any potential transfer of the franchise.

It is important for franchisees to understand this clause, as it could have significant financial implications if they decide to transfer their franchise. Franchisees should keep detailed records of all payments made to Exit, the subfranchisor, and the Brokers' Council to avoid any disputes regarding outstanding balances during a transfer. Additionally, franchisees should factor this potential accelerated payment into their financial planning when considering a transfer, ensuring they have sufficient funds available to cover the outstanding balance and interest.