On what page of the Exit Franchise Agreement can I find information about the grant of the franchise?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth in this Agreement and for other good and valuable consideration, Subfranchisor and Franchisee agree as follows:
1. FRANCHISEE INFORMATION
Franchisee certifies the accuracy of the information contained in Schedule 1 as of the date of this Agreement and agrees to immediately notify Subfranchisor of any changes in the information through the term of this Agreement.
2. GRANT OF FRANCHISE
2.1. Grant of Franchise.
Subfranchisor grants to Franchisee, and Franchisee accepts, the right to use the federally registered service mark "EXIT" and such other Proprietary Marks (as defined in Section 43 of this Agreement) as Subfranchisor may designate from time to time for the purpose of operating a real estate brokerage/real estate service office within the specific geographic area (the "Protected Territory") outlined in the Description of Protected Territory (Schedule 3 of this Agreement) during the term of this Agreement, upon the terms and conditions of this Agreement and in accordance with guidelines established by Subfranchisor and EXIT (the "Franchise"). This grant is conditioned upon (i) Franchisee obtaining and maintaining a valid real estate broker's license in the state containing the Protected Territory to enable Franchisee to perform the full range of real estate services to be provided under the System, (ii) Franchisee not defaulting under this Agreement, and (iii) this Agreement not being terminated, canceled or abandoned.
2.2. Exclusivity
- (A) So long as Franchisee is not in breach of this Agreement, neither Subfranchisor nor EXIT shall establish another real estate service Franchise or EXIT owned real estate service office within the Protected Territory using the Proprietary Marks.
- (B) In the Event of Default (which is not timely cured), then this Agreement shall automatically become nonexclusive and Subfranchisor, in addition to all of its other rights and remedies set forth in this Agreement, will have the right to own, operate, or sell franchises within the Protected Territory.
2.3. Conditions to Exclusivity
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the grant of the franchise is detailed in Section 2 of the Franchise Agreement. Specifically, Section 2.1 outlines the grant of the franchise by the Subfranchisor to the Franchisee. This section specifies that the Franchisee receives the right to use the "EXIT" service mark and other proprietary marks to operate a real estate brokerage within a defined geographic area, known as the Protected Territory, as described in Schedule 3 of the Agreement. This right is granted under the terms and conditions of the agreement and in accordance with the guidelines established by both the Subfranchisor and Exit.
The grant of the Exit franchise is conditional upon several factors. First, the Franchisee must obtain and maintain a valid real estate broker's license in the state where the Protected Territory is located. This license is necessary to perform the full range of real estate services under the Exit system. Second, the Franchisee must not be in default under the Franchise Agreement. Finally, the agreement must not be terminated, canceled, or abandoned. These conditions ensure that the Franchisee is qualified and compliant with the terms of the agreement to maintain the integrity of the Exit brand and system.
Section 2.2 further elaborates on the exclusivity of the franchise. As long as the Franchisee is not in breach of the agreement, neither the Subfranchisor nor Exit can establish another real estate service franchise or an Exit-owned real estate service office within the Protected Territory using the proprietary marks. However, this exclusivity is contingent upon the Franchisee's compliance with the agreement. If the Franchisee defaults and fails to cure the default in a timely manner, the agreement automatically becomes nonexclusive. In such a case, the Subfranchisor retains the right to own, operate, or sell franchises within the Protected Territory, in addition to any other rights and remedies available under the agreement.