Is the on-premises manager of an Exit franchise required to have an ownership interest in the franchise?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
As a Franchisee, you, or if you are an entity, an officer, member, director, partner or other person named as the real estate broker of record, must devote full time and best efforts to the Franchise business. If the Franchisee is operating as a corporation, partnership or limited liability company, you and all other equity holders in the company must execute a Personal Guaranty of the Franchise Agreement. In addition, in community or marital property states, your spouse may be required to sign the Personal Guaranty. Your business must be directly supervised "on premises" by a manager who has successfully completed EXIT's training programs. The on-premises manager cannot have an interest or business relationship with any of EXIT's competitors. The manager need not have an ownership interest in your corporate or partnership Franchise. The manager must sign a written agreement to maintain confidentiality of the proprietary information described in ITEM 14 and to conform with the covenants not to compete described in ITEM 17 of this Disclosure Document.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 27)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the on-premises manager of an Exit franchise is not required to have an ownership interest in the franchise. However, the manager must be directly supervised and have successfully completed Exit's training programs.
Furthermore, the on-premises manager cannot have any interest or business relationship with any of Exit's competitors. This restriction ensures that the manager's focus remains solely on the success of the Exit franchise and prevents any potential conflicts of interest. The manager is also required to sign a written agreement to maintain the confidentiality of proprietary information and adhere to the non-compete covenants outlined in the Franchise Disclosure Document.
This policy provides flexibility for Exit franchisees who may choose to hire a qualified manager without offering equity in the business. It also ensures that the manager is fully trained, dedicated, and bound by confidentiality and non-compete agreements to protect Exit's interests.