What is the Subfranchisor's obligation regarding the Franchisee's desired location for its Exit Franchise office?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
- (A) Franchisee shall cause a Franchise office to be opened and operating within the Protected Territory within a period not to exceed one hundred and twenty (120) calendar days from the date of this Agreement. Franchisee shall select a desired location for its Franchise office or any branch office within its Protected Territory and shall submit the location to Subfranchisor for approval, which approval shall not be unreasonably withheld. Subfranchisor will notify Franchisee of its approval or disapproval within thirty (30) days of its receipt of the request for approval. Franchisee may not proceed to open and operate a Franchise office, unless Subfranchisor has consented to the site. Franchisee is responsible for complying with all local ordinances and is responsible for obtaining all building permits and any other required permits. Franchisee must obtain and install all required equipment, signs, fixtures and supplies to furnish its office. The Franchise granted to you under this Agreement may not be used, directly or indirectly, at any location other than the location approved pursuant to this Section.
- (B) The Franchise office shall contain a minimum of between seven hundred and fifty (750) square feet to two thousand square feet (2,000) (leased or purchased), determined based on the size of the Protected Territory and shall be equipped with furniture, administrator, phones, and office equipment including computer, specific software and fax machine necessary to conduct the Franchise in accordance with the System. If Franchisee has not selected an office site, if Franchisee and Subfranchisor cannot agree on a site, or if Franchisee has not opened its office within one hundred twenty (120) days after it signed a Franchise Agreement, Subfranchisor may declare this Franchise Agreement null and void, without the return of any Initial Franchise Fee or other amounts paid to Subfranchisor or Franchisor.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, a franchisee must select a location for their franchise office within their protected territory and submit it to the subfranchisor for approval. The subfranchisor's approval cannot be unreasonably withheld. The subfranchisor has 30 days from receipt of the location request to notify the franchisee of their decision.
An Exit franchisee cannot open and operate a franchise office unless the subfranchisor has approved the site. The franchisee is responsible for complying with all local ordinances and obtaining all necessary building and other required permits. Additionally, the franchisee must acquire and install all required equipment, signs, fixtures, and supplies to furnish the office.
The Exit franchise office must be a minimum of 750 to 2,000 square feet, either leased or purchased, with the size determined by the size of the protected territory. The office must be equipped with furniture, an administrator, phones, and office equipment, including a computer, specific software, and a fax machine, necessary to conduct the franchise in accordance with the Exit system. If the franchisee has not selected an office site, if the franchisee and subfranchisor cannot agree on a site, or if the franchisee has not opened its office within 120 days after signing the Franchise Agreement, the subfranchisor may void the Franchise Agreement without refunding any initial franchise fee or other amounts paid.