factual

After the Exit franchise agreement terminates, am I allowed to induce equity-holders in an Exit franchisee to terminate their relationship with Exit?

Exit Franchise · 2025 FDD

Answer from 2025 FDD Document

  • (e) solicit or induce any person who is, at the time of termination or expiration of this Agreement an EXIT franchisee or an equity-holder in any entity which is, at the time of termination or expiration of this Agreement an EXIT franchisee, to terminate or not renew his relationship with EXIT or Subfranchisor; or

Source: Item 23 — RECEIPT (FDD pages 42–235)

What This Means (2025 FDD)

According to Exit's 2025 Franchise Disclosure Document, after the termination or expiration of the franchise agreement, you are not allowed to solicit or induce any person who is an equity-holder in any entity which is an Exit franchisee to terminate or not renew their relationship with Exit. This restriction is in place to protect Exit and its subfranchisors.

This post-term covenant prevents former franchisees from actively recruiting current Exit franchisees or their equity holders to leave the Exit system. This type of restriction is common in franchising to protect the brand's network and stability.

As a prospective franchisee, it's important to understand the scope and duration of these post-termination restrictions. You should consider how these limitations might affect your future business opportunities if you decide to leave the Exit system. It would be prudent to seek legal counsel to fully understand the implications of these covenants not to compete.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.