If the Exit Franchise Agreement requires consent or approval from either party, can that consent or approval be unreasonably withheld?

According to Exit's 2025 Franchise Disclosure Document, when the Franchise Agreement requires consent or approval from either the subfranchisor or the franchisee, such consent or approval will not be unreasonably withheld. The agreement also states that responses to requests for approval must be given within a reasonable time frame.

This provision is fairly common in franchise agreements and aims to ensure that neither party can use required approvals to unfairly impede the other's business operations. For a prospective Exit franchisee, this means that if you need consent from the subfranchisor for something specified in the agreement, such as a transfer of ownership, the subfranchisor cannot arbitrarily deny that consent.

However, it's important to understand what constitutes "unreasonable" withholding of consent, as this can be subjective and may lead to disputes. While the clause provides some protection, franchisees should still carefully consider all requirements for obtaining consent and maintain open communication with the subfranchisor to avoid potential conflicts. Documenting all requests and responses related to consent is advisable to protect your interests as a franchisee.