What happens if an Exit franchisee attempts an unauthorized transfer of their franchise interest?

According to Exit's 2025 Franchise Disclosure Document, any unauthorized transfer of the franchise, whether voluntary, involuntary, or by operation of law, is considered void. Furthermore, any attempt to make such a transfer can be grounds for the subfranchisor to terminate the Franchise Agreement. This means Exit franchisees must obtain prior written consent from the subfranchisor before transferring any interest in their franchise.

To obtain consent for a transfer, the Exit franchisee must meet several conditions. They must fully comply with all provisions of the Franchise Agreement, cure any defaults, and pay all monies due to Exit, the subfranchisor, and the Brokers' Council. The franchisee must also provide current and accurate financial statements and other documents that allow the subfranchisor to assess the proposed transferee's character, creditworthiness, business experience, net worth, professional credentials, and ethical background.

Additional requirements for a transfer include providing copies of the transfer documents in a form acceptable to the subfranchisor, complete financial information on the franchise, and a full general release and waiver in favor of the subfranchisor, Exit, and their affiliates. The proposed transferee must also sign the subfranchisor's current form of Guaranty Agreement and complete the required training. Finally, the franchisee must pay a transfer fee, the amount of which depends on whether the transfer is a Major Transfer (50% or more interest) or a Minor Transfer (less than 50% interest).