After the Exit franchise agreement terminates, can I divert business from an Exit franchisee to a competitor?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
- (f) divert, or attempt to divert, any business or customer of an EXIT Franchisee, to any competitor; or
The parties expressly agree that the covenants contained in this section are each independent and are reasonable and necessary to protect Subfranchisor and other EXIT franchises if this Agreement expires or is terminated for any reason.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, after the franchise agreement terminates, franchisees are prohibited from diverting business from an Exit franchisee to a competitor. Specifically, the franchisee cannot divert, or attempt to divert, any business or customer of an Exit franchisee to any competitor.
This restriction is in place to protect the subfranchisor and other Exit franchises, and the parties agree that these covenants are reasonable and necessary for that purpose. These restrictions apply regardless of whether the agreement expires or is terminated for any reason.
This post-term covenant is designed to prevent former franchisees from unfairly capitalizing on the goodwill and customer relationships established within the Exit system. It ensures that competition remains fair and that the integrity of the Exit brand and its network of franchisees is maintained, even after a franchise agreement ends.