What is the required action for the Franchisee regarding modifications to the Exit Formula?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
It is understood that this EXIT Formula may not be changed or modified in any way without the prior express written permission of EXIT. EXIT reserves the right to modify this EXIT Formula and may increase the Annual Membership and fees up to 5% per year. If EXIT increases any amounts less than 5%, the unused portion may be carried over to subsequent years. Any modification shall become effective upon notice to all Subfranchisors and Franchisees. It shall be Franchisee's obligation to notify its Sales Representatives and employees of modifications in the EXIT Formula.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the Exit Formula cannot be changed or modified without prior express written permission from Exit. However, Exit retains the right to modify the Exit Formula, including increasing annual membership and fees by up to 5% per year. If Exit increases any amounts less than 5%, the unused portion may be carried over to subsequent years. Any modification becomes effective upon notice to all Subfranchisors and Franchisees.
It is the franchisee's responsibility to inform their sales representatives and employees of any changes to the Exit Formula. This ensures that all members of the Exit team are aware of the current fee structure and any modifications that may impact their compensation or financial obligations.
This requirement is typical in franchising, as franchisors need the ability to update their systems and fee structures to remain competitive and adapt to changing market conditions. However, it also places a responsibility on the franchisee to stay informed and communicate these changes effectively to their team.