Does termination of the Exit Agreement by the Subfranchisor relieve the Franchisee of monetary obligations?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
- (B) Termination of this Agreement by Subfranchisor shall not terminate any monetary obligations owed by Franchisee to EXIT, Subfranchisor or the Brokers' Council.
Termination of this Agreement by Subfranchisor shall not be an exclusive remedy and shall not in any way affect the rights of EXIT or Subfranchisor to receive, or collect fees or other amounts payable by Franchisee under this Agreement, to enforce the provisions of this Agreement against Franchisee, to sue for damages, seek and obtain ex parte injunctive relief, to pursue any other equitable remedy for breach of this Agreement by Franchisee or otherwise constitute a waiver of any of Subfranchisor's other rights upon the occurrence of an Event of Default.
Subfranchisor shall not be obligated following any such termination or cancellation, to refund any amount previously paid by Franchisee under the terms of this Agreement.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, termination of the Franchise Agreement by the Subfranchisor does not relieve the Franchisee of their monetary obligations. The Franchisee is still responsible for any payments owed to Exit, the Subfranchisor, or the Brokers' Council, even after termination. This means that any outstanding fees, royalties, or other financial commitments remain in effect.
Exit's Subfranchisor retains the right to collect any fees or amounts owed by the Franchisee under the agreement, even after termination. They can also enforce the provisions of the agreement, sue for damages, seek injunctive relief, or pursue any other legal remedy for breach of contract. The Subfranchisor is not obligated to refund any amounts previously paid by the Franchisee, regardless of the termination.
This provision protects Exit and the Subfranchisor's financial interests by ensuring that they can recover any outstanding debts or damages resulting from the Franchisee's actions or breach of contract. For a prospective franchisee, this highlights the importance of understanding all financial obligations and potential liabilities under the Franchise Agreement, as these obligations will continue even if the agreement is terminated by the Subfranchisor.