What must an Exit franchisee do regarding defaults and noncompliance to obtain consent for a transfer?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
- (A) Franchisee shall have fully complied with the provisions of this Agreement, curing all defaults and noncompliance under this Agreement and any other franchise agreements it may have with Subfranchisor and EXIT; and
- (B) Franchisee shall have paid fully all monies due EXIT, Subfranchisor, and Brokers' Council; and
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, a franchisee seeking to transfer their franchise must first address any existing defaults or noncompliance issues. Specifically, the franchisee must fully comply with all provisions of the Franchise Agreement, which includes curing all defaults and noncompliance issues present under the agreement. This requirement extends not only to the current agreement but also to any other franchise agreements the franchisee may have with the Subfranchisor and Exit.
In addition to curing defaults and ensuring compliance, the Exit franchisee must also fulfill all outstanding financial obligations. This means paying all monies due to Exit, the Subfranchisor, and the Brokers' Council. These financial obligations likely cover a range of fees and payments associated with the franchise operation.
By ensuring full compliance with the franchise agreement and settling all outstanding financial obligations, the Exit franchisee demonstrates their commitment to fulfilling their contractual duties. This increases the likelihood of obtaining the Subfranchisor's consent for the transfer, as it mitigates potential risks and liabilities for the Subfranchisor and Exit.