Does Exit have the right to control litigation involving proprietary information?

According to Exit's 2025 Franchise Disclosure Document, Exit has the right to control any litigation involving its proprietary information. Proprietary information includes the information in Exit's training manuals, various advertising, and sales promotion materials used in connection with the Exit system.

This means that if a legal dispute arises concerning the unauthorized use or infringement of Exit's proprietary information, Exit has the authority to direct and manage the legal proceedings. As a franchisee, you are required to promptly inform Exit of any unauthorized use of proprietary information, but Exit is not obligated to take any action. However, Exit will respond to the information as it deems appropriate.

Furthermore, Exit will defend a franchisee against claims made by a third party regarding the franchisee's use of Exit's proprietary information. This protection offers a level of security for franchisees, as Exit assumes responsibility for defending against such claims, which can be a significant benefit considering the potential costs and complexities of litigation.

This arrangement is fairly typical in franchising, as franchisors need to protect their brand standards, trade secrets, and intellectual property. By retaining control over litigation, Exit can ensure consistent and strategic management of legal issues related to its proprietary information, which helps maintain the integrity and value of the Exit system.