For an Exit franchise, what are the two possible lengths of a Renewal Term?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall have the option to renew this Agreement for subsequent five (5) year or ten (10) year terms (each referred to as a "Renewal Term"), provided that Franchisee has complied with the following conditions:
- (A) During the term of this Agreement, Franchisee has complied with all of the material terms and conditions of this Agreement and has complied with EXIT's operating and performance standards and procedures; and
- (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
- (C) Franchisee, on or before the first (1st) day of the Renewal Term, executes the then-current standard Franchise Agreement being offered to new Franchisees by the Subfranchisor for either five (5) or ten (10) year renewal, as requested by Franchisee; 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
- (E) Franchisee shall pay to Subfranchisor, on or before the first (1st) day of the Renewal Term, a Renewal Fee of ten percent (10%) of the then current Initial Franchise Fee for your size franchise territory (not to exceed 25% of the Initial Franchise fee paid) for a five (5) year term renewal or a Renewal Fee of fifteen percent (15%) of the then current Initial Fee for your size franchise territory (not to exceed 37.5% of the Initial Fee paid) for a ten (10) year term renewal; and
- (F) On or before the first (1st) day of the Renewal Term, Franchisee attends the training programs provided by Subfranchisor and EXIT for renewing franchisees.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, a franchisee has the option to renew their franchise agreement for either a five-year term or a ten-year term. This flexibility allows franchisees to choose a renewal period that best aligns with their long-term business goals and financial planning.
To be eligible for renewal, an Exit franchisee must meet several conditions. These include compliance with all material terms and conditions of the franchise agreement, adherence to Exit's operating and performance standards, and providing written notice of their intent to renew at least six months before the current term expires. The franchisee must also execute the then-current standard franchise agreement for new franchisees, specific to either a five-year or ten-year renewal, as requested.
In addition to these requirements, the Exit franchisee must have satisfied all monetary obligations to Exit and the subfranchisor in a timely manner throughout the term of the agreement. They must also pay a renewal fee. For a five-year renewal, the fee is 10% of the then-current initial franchise fee for the territory size, not exceeding 25% of the initial fee paid. For a ten-year renewal, the fee is 15% of the then-current initial franchise fee, not exceeding 37.5% of the initial fee paid. Finally, the franchisee must attend the training programs provided by Exit and the subfranchisor for renewing franchisees before the start of the renewal term.