Is the Exit FDD receipt acknowledgement dependent on the franchisee meeting certain financial criteria?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
Subfranchisor will not unreasonably withhold its consent, which consent must be in writing, to any proposed Transfer, provided Franchisee and/or the transferee comply with the following, non-exclusive, conditions:
- (A) Franchisee shall have fully complied with the provisions of this Agreement, curing all defaults and noncompliance under this Agreement and any other franchise agreements it may have with Subfranchisor and EXIT; and
- (B) Franchisee shall have paid fully all monies due EXIT, Subfranchisor, and Brokers' Council; and
- (C) Franchisee shall submit to Subfranchisor current, accurate financial statements and other documents sufficient to enable Subfranchisor to determine and approve (in its discretion) the character, integrity, creditworthiness, business experience, reasonable net worth, professional credentials and ethical background of the proposed transferee;
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the franchisee's financial standing is considered when transferring ownership. Specifically, if a franchisee wishes to transfer their franchise to another party, the franchisee must meet several conditions.
Among these conditions, the franchisee must have fully paid all monies due to Exit, the Subfranchisor, and the Brokers' Council. Additionally, the franchisee needs to provide current and accurate financial statements to the Subfranchisor. This allows the Subfranchisor to assess the proposed transferee's character, integrity, creditworthiness, business experience, reasonable net worth, professional credentials, and ethical background.
These requirements ensure that any transfer of the Exit franchise maintains a certain level of financial stability and responsibility. The Subfranchisor has the discretion to approve or disapprove the transfer based on their assessment of the transferee's financial and professional background, protecting the Exit brand and network.