What is the standard term length, in years, for an Exit franchise agreement?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
The term of this Agreement shall commence on the Compliance Date and, unless sooner terminated as provided in this Agreement, shall expire five (5) years after the Compliance Date (the "Expiration Date").
5.2. Renewal Terms
Franchisee shall have the option to renew this Agreement for subsequent five (5) year or ten (10) year terms (each referred to as a "Renewal Term"), provided that Franchisee has complied with the following conditions:
- (A) During the term of this Agreement, Franchisee has complied with all of the material terms and conditions of this Agreement and has complied with EXIT's operating and performance standards and procedures; and
- (B) Franchisee has given Subfranchisor written notice at least six (6) months prior to the end of the term of this Agreement of its intention to renew this Agreement for either five (5) or ten (10) years; and
- (C) Franchisee, on or before the first (1st) day of the Renewal Term, executes the then-current standard Franchise Agreement being offered to new Franchisees by the Subfranchisor for either five (5) or ten (10) year renewal, as requested by Franchisee; and
- (D) All monetary obligations owed by Franchisee to EXIT and Subfranchisor have been timely paid or satisfied prior to the end of the term of this Agreement, and have been timely paid throughout the term of this Agreement; and
- (E) Franchisee shall pay to Subfranchisor, on or before the first (1st) day of the Renewal Term, a Renewal Fee of ten percent (10%) of the then current Initial Franchise Fee for your size franchise territory (not to exceed 25% of the Initial Franchise fee paid) for a five (5) year term renewal or a Renewal Fee of fifteen percent (15%) of the then current Initial Fee for your size franchise territory (not to exceed 37.5% of the Initial Fee paid) for a ten (10) year term renewal; and
- (F) On or before the first (1st) day of the Renewal Term, Franchisee attends the training programs provided by Subfranchisor and EXIT for renewing franchisees.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the initial term of the franchise agreement is five years. The agreement starts on the Compliance Date and ends five years later, unless terminated earlier as per the agreement's provisions. This means a franchisee can expect to operate under the initial agreement for this duration, assuming they meet all obligations.
Exit offers franchisees the option to renew their agreement for additional terms. These renewal terms can be either five or ten years, providing flexibility for the franchisee. To qualify for renewal, the franchisee must meet several conditions, including compliance with the agreement's terms, adherence to Exit's operating standards, providing timely written notice of intent to renew, and fulfilling all financial obligations to Exit.
In addition to meeting the above requirements, franchisees must execute the then-current standard franchise agreement for new franchisees and attend required training programs. A renewal fee is also required, calculated as a percentage of the then-current initial franchise fee, with the percentage varying based on the length of the renewal term. Specifically, a five-year renewal requires a fee of 10% of the initial franchise fee, while a ten-year renewal requires 15%.