What financial obligations must an Exit franchisee fulfill to secure consent for a transfer?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
en consent of Subfranchisor, as provided in Section 18.3 below. Any
unauthorized Transfer, whether voluntary, involuntary, by operation of law or otherwise, or any attempt to do so, shall be deemed void and be grounds for termination of this Agreement by Subfranchisor.
18.3. Consent to Transfer Conditions
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 und
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, a franchisee seeking to transfer their franchise must meet specific financial obligations to gain approval from the subfranchisor. The franchisee must first fully comply with all provisions of the Franchise Agreement, which includes curing any existing defaults or noncompliance issues under the agreement or any other franchise agreements they may have with Exit or the subfranchisor.
Furthermore, the franchisee is required to have paid all monies due to Exit, the subfranchisor, and the Brokers' Council. This indicates that all outstanding debts, fees, or other financial obligations must be settled before a transfer can be considered. Additionally, the franchisee must pay the transfer fee as required under Section 18.5 of the agreement.
These conditions ensure that Exit maintains financial integrity and that any potential transferee is not burdened with the previous franchisee's outstanding debts. By requiring full compliance and payment of all dues, Exit aims to protect its brand and the interests of its other franchisees. Prospective franchisees should be aware of these requirements, as failure to meet them can impede the transfer process.