Is an Exit franchisee prohibited from diverting business from other Exit franchisees to a competitor after termination?

According to Exit's 2025 Franchise Disclosure Document, a franchisee is prohibited from diverting business or customers of an Exit franchisee to any competitor. This restriction applies both during the term of the agreement and after termination. This is designed to protect the Exit system and its franchisees from unfair competition and to maintain the integrity of the brand.

This post-term covenant is in place to prevent a former franchisee from leveraging their knowledge and relationships gained while operating under the Exit brand to benefit a competing business. The FDD states that these covenants are considered reasonable and necessary to protect the subfranchisor and other Exit franchises, reinforcing the importance Exit places on preventing such diversions.

This restriction is part of a broader set of covenants that Exit franchisees agree to, including non-compete clauses and confidentiality agreements. These measures are intended to safeguard Exit's market position and the interests of its franchisees by preventing the misuse of confidential information and the diversion of business to competitors, even after a franchisee leaves the system.