What specific franchisee obligations, upon termination or expiration of the Exit agreement, can the subfranchisor seek to enforce through injunctive relief?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
Subfranchisor will be entitled to seek the entry of temporary and permanent injunctions and orders of specific performance enforcing the provisions of this Agreement relating to: (i) the Proprietary Marks and the EXIT System; (ii) the obligations of Franchisee upon termination or expiration of this Agreement; (iii) assignment of this Agreement or ownership interests of Franchisee; (iv) the covenants not to compete; (v) confidentiality; or (vi) any act or omission by Franchisee, Franchisee's employees or Franchisee's agents that: (1) constitutes a violation of any applicable law, ordinance or regulation; (2) is dishonest or misleading; or (3) may impair the goodwill associated with the Proprietary Marks and the EXIT System. Franchisee agrees that any violations will cause serious, irreparable injury to the EXIT System that cannot be compensated for by money damages and that the provisions of this section are necessary to protect the legitimate business interests of EXIT and Subfranchisor and other franchisees including, without limitation, prevention of damage to or loss of goodwill associated with the Proprietary Marks, prevention of the unauthorized dissemination of marketing, promotional and other confidential information to competitors of EXIT and other franchisees, protection of EXIT's trade secrets, and the integrity of the EXIT System, and the prevention of duplication of the System. Franchisee will indemnify the Subfranchisor for all costs that it incurs in any such proceedings including, without limitation, reasonable attorneys' fees, expert witness fees, costs of investigation, court costs, accounting fees, travel and living expenses, and all other related costs incurred by Subfranchisor. Subfranchisor will be entitled to obtain injunctive relief against Franchisee enforcing the foregoing provisions without the need to present evidence of irreparable injury and without the posting of any bond or security.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the subfranchisor can seek temporary and permanent injunctions and orders of specific performance to enforce franchisee obligations upon termination or expiration of the franchise agreement.
Specifically, Exit's subfranchisor can pursue injunctive relief related to the franchisee's obligations regarding the Proprietary Marks and the Exit System. This means the subfranchisor can legally compel the franchisee to cease using Exit's trademarks, service marks, logos, and other intellectual property after the agreement ends.
Additionally, the subfranchisor can seek injunctive relief to enforce non-compete agreements and confidentiality obligations. This aims to prevent former franchisees from using Exit's confidential information or trade secrets to compete with the system. The franchisee also agrees to cover all costs the subfranchisor incurs during these proceedings, including attorney's fees and expert witness fees. The subfranchisor is entitled to obtain injunctive relief without needing to present evidence of irreparable injury or post a bond.