Does termination of the Exit Agreement by the Subfranchisor relieve the Franchisee of any 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 any monetary obligations owed to Exit, the Subfranchisor, or the Brokers' Council. The franchisee is responsible for all fees and other amounts payable under the agreement, even after termination. The Subfranchisor's termination of the agreement does not affect Exit's or the Subfranchisor's rights to collect these fees or enforce the agreement. The Subfranchisor is not obligated to refund any amounts previously paid by the franchisee.
Exit can seek recovery from the franchisee for damages sustained prior to termination or in the future as a result of the franchisee's breach. Because actual damages for the loss of prospective fees are difficult to ascertain, the franchisee agrees to pay liquidated damages. These damages are equal to the average monthly Continuing Fees paid to the Subfranchisor and Exit, calculated using the Exit Formula for the 12 months preceding termination, multiplied by the number of months remaining until the agreement's expiration date.
Even after termination or non-renewal of the Exit agreement, all provisions concerning the franchisee's obligations to Exit, the Subfranchisor, and the Broker's Council remain in effect. The franchisee must also close all transactions under contract at the time of termination through Exit's proprietary system, MEMO, and pay all company development fees, transaction fees, and regional development fees that are due. If termination is due to default or other agreed-upon terms, sponsoring bonuses to associates who are no longer with Exit will be paid to the Subfranchisor, or if the Subfranchisor does not exist, to Exit.