After the Exit franchise agreement terminates, can I solicit Exit franchisees to terminate their relationship with Exit?
Exit Franchise · 2025 FDDAnswer 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;
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, you are prohibited from soliciting or inducing any Exit franchisee to terminate or not renew their relationship with Exit. This restriction applies regardless of whether the agreement expires or is terminated.
This post-term covenant is designed to protect Exit's franchise system and prevent former franchisees from disrupting the network. It ensures that franchisees who leave the system cannot actively recruit existing franchisees to leave as well, which could harm the brand and its franchisees.
The Exit FDD emphasizes that these covenants are considered reasonable and necessary to protect the subfranchisor and other Exit franchises, regardless of the reason for termination or expiration of the agreement. Franchisees should be aware of these restrictions and their potential impact on their activities after leaving the Exit system.