In the Exit franchise agreement, is time considered important for fulfilling the agreement's provisions?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
Whenever this Agreement may require the consent or approval of either party, such consent or approval shall not be unreasonably withheld. Response to requests of approval shall be given within a reasonable period of time.
Upon an Event of Default (unless cured in a timely manner), expiration or termination of this Agreement for whatever reason, Subfranchisor shall have the right to immediately establish, operate or franchise an EXIT franchise anywhere within the Protected Territory.
(i) Franchisee fails to open its EXIT office and commence business operations within one hundred and twenty (120) days of the date of this Agreement.
(ii) Franchisee voluntarily abandons the franchise by failing to operate the franchise in accordance with the terms of this Agreement, within the Protected Territory for a period of ten (10) consecutive days, or for twenty (20) days in any period of thirty (30) consecutive days, unless such failure is due to fire, flood, earthquake or similar cause beyond Franchisee's control.
(B) Franchisee has given Subfranchisor written notice at least six (6) months prior to the end of the term of this Agreement of its intention to renew this Agreement for either five (5) or ten (10) years; and
(D) All monetary obligations owed by Franchisee to EXIT and Subfranchisor have been timely paid or satisfied prior to the end of the term of this Agreement, and have been timely paid throughout the term of this Agreement; and
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, time is indeed a significant factor in fulfilling the franchise agreement's provisions. The agreement specifies time-sensitive obligations for franchisees, such as opening their Exit office and commencing business operations within 120 days of the agreement date. Failure to meet this deadline can result in termination of the agreement without any opportunity to rectify the situation.
Furthermore, the Exit franchise agreement emphasizes the importance of timeliness in other aspects, including renewal terms. Franchisees must provide written notice of their intent to renew the agreement at least six months before the end of the current term. Additionally, all monetary obligations to Exit and the subfranchisor must be paid on time throughout the agreement's duration to qualify for renewal. These stipulations highlight the necessity for franchisees to manage their time effectively and adhere to deadlines to maintain good standing and secure the continuation of their franchise.
Moreover, the agreement addresses scenarios of default, outlining specific timeframes that trigger consequences. For instance, voluntarily abandoning the franchise by failing to operate within the protected territory for ten consecutive days, or for twenty days within any thirty-day period, constitutes a default, unless caused by events beyond the franchisee's control like natural disasters. This underscores the need for consistent and timely operation of the franchise to avoid potential breaches of the agreement. Also, whenever the agreement requires consent or approval of either party, responses to requests of approval must be given within a reasonable period of time.