Is an Exit franchisee allowed to engage in any business or use the Exit Proprietary Marks in a manner not contemplated in the Franchise Agreement without prior written consent from both the Subfranchisor and Franchisor?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall not directly or indirectly engage in any business or otherwise use the Proprietary Marks or any part of the System for any purpose or in any manner not contemplated in this Agreement, without the prior written consent of Subfranchisor and Franchisor. If Franchisee desires to offer any services other than those services that are part of the System (e.g., property management services), such services may be offered through a separate legal entity but shall not be offered through Franchisee.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, franchisees are restricted from engaging in any business or using Exit's proprietary marks in ways not explicitly outlined in the Franchise Agreement. To do so, an Exit franchisee must obtain prior written consent from both the Subfranchisor and the Franchisor.
This requirement ensures that franchisees operate within the bounds of the franchise agreement and maintain the integrity of the Exit brand. It prevents franchisees from branching out into unrelated ventures that could dilute the brand or create conflicts of interest. It also protects Exit's trademarks and proprietary system from unauthorized use.
However, if an Exit franchisee wishes to offer services outside of those included in the Exit system, such as property management, they may do so through a separate legal entity. This allows franchisees to diversify their business interests while keeping them distinct from the Exit franchise. This ensures compliance with the franchise agreement and protects the Exit brand.
This policy is typical in franchising, as franchisors need to maintain brand consistency and control over their systems. Prospective Exit franchisees should carefully consider this restriction and ensure they are comfortable operating within the defined scope of the franchise agreement, or be prepared to create separate business entities for other ventures.