During the term of the Exit franchise agreement, what must a franchisee comply with to be eligible for renewal?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
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, a franchisee has the option to renew their agreement for subsequent five or ten-year terms, provided they meet certain conditions. These conditions include compliance with all material terms and conditions of the existing agreement, as well as Exit's operating and performance standards and procedures.
To initiate the renewal process, the franchisee must provide written notice to the Subfranchisor at least six months before the current term expires, indicating their intention to renew for either five or ten years. Additionally, the franchisee must execute the then-current standard franchise agreement offered to new franchisees by the Subfranchisor for the chosen renewal term (five or ten years) on or before the first day of the renewal term.
Financially, the franchisee must have timely paid or satisfied all monetary obligations owed to Exit and the Subfranchisor throughout the term of the agreement. They must also pay a renewal fee on or before the first day of the renewal term. The renewal fee is 10% of the then-current initial franchise fee for a five-year renewal, or 15% for a ten-year renewal, with caps of 25% and 37.5% of the initial fee paid, respectively. Finally, the franchisee must attend the training programs provided by the Subfranchisor and Exit for renewing franchisees on or before the first day of the Renewal Term.