What obligations does a franchisee of Exit Realty Upper Midwest have upon termination or non-renewal of the franchise agreement?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
| i. | Your obligations on termination/non-renewal | 17, 21.2 | | r. | Non-competition covenants after the Franchise is terminated or expires. | 21 | Subject to state law, no competing business similar to EXIT for 1 year within the area licensed by us from EXIT. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 27–31)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, Item 17 generally discusses a franchisee's obligations upon termination or non-renewal, as indicated in the table. Specifically, after the franchise is terminated or expires, the franchisee is subject to state law regarding non-competition covenants.
The FDD states that the franchisee cannot be involved in any competing business similar to Exit for one year within the area licensed by Exit. This non-compete clause is subject to state law, meaning its enforceability and specific terms may vary depending on the franchisee's location.
Prospective franchisees should carefully review Section 21.2 of the franchise agreement, as referenced in the table, to fully understand their post-termination obligations. Additionally, franchisees should be aware that several states have statutes that may supersede the franchise agreement, particularly concerning termination and renewal. It is important to consult with a legal professional to understand the specific implications of these statutes in their state.