What is the Exit franchisee prohibited from doing that may impair the goodwill associated with the Proprietary Marks and the EXIT System?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
Subfranchisor will be entitled to seek the entry of temporary and permanent injunctions and orders of specific performance enforcing the provisions of this Agreement relating to: (i) the Proprietary Marks and the EXIT System; (ii) the obligations of Franchisee upon termination or expiration of this Agreement; (iii) assignment of this Agreement or ownership interests of Franchisee; (iv) the covenants not to compete; (v) confidentiality; or (vi) any act or omission by Franchisee, Franchisee's employees or Franchisee's agents that: (1) constitutes a violation of any applicable law, ordinance or regulation; (2) is dishonest or misleading; or (3) may impair the goodwill associated with the Proprietary Marks and the EXIT System. Franchisee agrees that any violations will cause serious, irreparable injury to the EXIT System that cannot be compensated for by money damages and that the provisions of this section are necessary to protect the legitimate business interests of EXIT and Subfranchisor and other franchisees including, without limitation, prevention of damage to or loss of goodwill associated with the Proprietary Marks, prevention of the unauthorized dissemination of marketing, promotional and other confidential information to competitors of EXIT and other franchisees, protection of EXIT's trade secrets, and the integrity of the EXIT System, and the prevention of duplication of the System.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, a franchisee is prohibited from any act or omission by the franchisee, the franchisee's employees, or the franchisee's agents that may impair the goodwill associated with the Proprietary Marks and the Exit System. This includes violations of any applicable law, ordinance, or regulation, or any dishonest or misleading actions.
This means that Exit franchisees must ensure their business operations are conducted ethically and legally to protect the brand's reputation. Any actions that could damage the goodwill associated with the Exit name, such as engaging in deceptive practices or violating local laws, are strictly prohibited.
Exit emphasizes the importance of protecting its brand and system, and any impairment to the goodwill associated with the Proprietary Marks and the Exit System can result in legal action, including injunctions and financial penalties. Franchisees should ensure that all employees and agents are aware of these restrictions and adhere to the highest standards of conduct to avoid any potential damage to the Exit brand.