Will Exit guarantee any other financial obligation a franchisee may enter into?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee is and shall be an independent contractor, and nothing contained in this Agreement shall be construed to create a partnership, joint venture, employment or other relationship between parties. Neither Subfranchisor nor Franchisee shall act as an agent for the other or as guarantor or surety for the obligations of the other. Neither party shall be obligated for the debts or expenses of the other. Franchisee does not have the authority to bind or obligate EXIT or Subfranchisor in any way by any promise or representation.
Source: Item 10 — FINANCING (FDD page 19)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, Exit will not act as a guarantor or surety for the financial obligations of its franchisees. The franchise agreement explicitly states that neither Exit nor the franchisee is obligated for the debts or expenses of the other. This reinforces the independent contractor relationship between Exit and its franchisees.
This arrangement means that franchisees are solely responsible for securing their own financing and managing their financial obligations. Exit does not provide any guarantees to third parties on behalf of its franchisees. This is a common arrangement in franchising, as it keeps the franchisor from being liable for the debts of its franchisees.
Prospective franchisees should be aware that they will need to qualify for financing based on their own creditworthiness and business plan. They cannot rely on Exit's financial strength to secure loans or leases. This independence also means that franchisees retain the profits from their business, but also bear the full risk of any losses.