What is the required cure period for an Exit Franchisee's Event of Default described in Section 16.1(A)(i) before the Subfranchisor can terminate the agreement?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
- (ii) Upon the occurrence of an Event of Default described in Section 16.1(A)(i), Subfranchisor may terminate and cancel this Agreement upon thirty (30) days' prior written notice to Franchisee.
The notice shall demand immediate cure of the Event of Default and advise Franchisee that if the Event of Default specified in the notice is not cured within ten (10) days, all rights of Franchisee under this Agreement shall be cancelled and terminated without further notice 30 days from the date of the default notice.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, if a franchisee, or any entity controlled by the franchisee, fails to pay their financial obligations to Exit, the subfranchisor, other Exit subfranchisors, or the Brokers' Council, including payments due under any promissory note, the subfranchisor can terminate the agreement if the default is not cured within a specific timeframe.
Specifically, the Exit subfranchisor must provide the franchisee with thirty (30) days prior written notice of termination. This notice will demand immediate cure of the default. If the franchisee does not cure the payment default within ten (10) days of the notice, all rights of the franchisee under the agreement will be cancelled and terminated 30 days from the date of the default notice.
In summary, while the initial notice period is 30 days, the franchisee only has 10 days to cure the payment default to avoid termination of the Exit franchise agreement. This is a shorter cure period compared to other types of defaults, which typically allow for a 30-day cure period.