What rights does Exit Subfranchisor retain even after terminating the agreement?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
ntinuing Fees paid to Subfranchisor and EXIT in accordance with the EXIT Formula for the twelve (12) month period immediately preceding the termination multiplied by the number of months remaining until the Expiration Date.
17. POST TERMINATION - RIGHTS AND OBLIGATIONS
17.1. Obligations upon Termination or Non-renewal
If this Agreement is terminated or not renewed:
- (A) All provisions in this Agreement concerning obligations of Franchisee to EXIT, Subfranchisor and the Broker's Council shall be deemed to survive the termination of this Agreement.
- (B) All rights of Franchisee under this Agreement shall terminate and Franchisee shall immediately discontinue all use, imitation or duplication of all distinguishing characteristics of the System, including but not limited to, trade names, trademarks, service marks, membership marks, certification marks, copyrights, designs, slogans, logos, names, advertising copy or other printed or physical materials now or hereafter displayed, used or becoming a part of the System.
- (C) Franchisee shall immediately cease and refrain from using the System, or any parts thereof, and Franchisee shall immediately cease and refrain from holding itself out to the public in any way as a member of or as a former member of the System or as a Franchisee, Affiliate or operator of the System.
- (D) Franchisee shall immediately distinguish its operations from that of EXIT, Subfranchisor, and of EXIT Affiliates so as to avoid every possibility of any confusion to the public.
- (E) Franchisee, at its expense, shall make or cause to be made such changes in signs, telephone numbers, buildings or structures as EXIT or Subfranchisor may direct in order to distinguish Franchisee effectively from its former appearance and from other EXIT Affiliates. The changes shall include a complete change in the trade name from that under which Franchisee conducted its business while affiliated with the System. If Franchisee shall, upon request, fail or omit to make or cause to be made the changes within ten (10) days, then Subfranchisor shall have the right to enter upon the premises, without liability, and make, or cause to be made, the changes at the expense of Franchisee, which expenses shall be paid by Franchisee upon demand.
- (F) Franchisee shall, at Subfranchisor's direction, file the appropriate forms to abandon and/or withdraw any assumed name certificate, to cease all activities with and claims to ownership of any trade or assumed name containing any Proprietary mark or to transfer the same to Subfranchisor, and/or to change the name of its corporation, partnership, or affiliate to eliminate any reference to the System.
- (G) Franchisee shall immediately return to Subfranchisor all manuals, bulletins, instruction sheets, forms, marks, designs, signs, printed matter, and other material obtained by Franchisee under and pursuant to this Agreement, together with copies of the same that may have been made by Franchisee, or that are in its possession, custody or control.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, even after the termination of the franchise agreement, the subfranchisor retains several important rights and abilities. All obligations of the franchisee to Exit, the subfranchisor, and the Broker's Council remain in effect. The subfranchisor is also entitled to seek recovery from the franchisee for damages sustained before the termination or in the future as a result of the franchisee's breach. This includes the ability to pursue remedies under state or federal laws, such as recovery of attorneys' fees, punitive damages, and injunctive relief.
Exit's subfranchisor is entitled to collect fees or other amounts payable by the franchisee, enforce the agreement's provisions, sue for damages, seek injunctive relief, and pursue other equitable remedies for breach of the agreement. The subfranchisor is not obligated to refund any amounts previously paid by the franchisee. Upon termination, the subfranchisor has the right to establish, operate, or franchise an Exit franchise within the protected territory.
Furthermore, the subfranchisor can execute documents in the franchisee's name to discontinue the franchisee's use of trade names, copyrights, and other proprietary marks if the franchisee fails to do so. The franchisee must also assign all rights to Franchise Agreements and Approved Supplier Agreements to the subfranchisor. These measures ensure that Exit's subfranchisor can protect its interests and maintain control over the franchise operations and brand integrity within the territory, even after a franchise agreement ends.