Is termination the exclusive remedy available to the Exit Subfranchisor for Franchisee default?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
ys from the date thereof, upon presentation of any affidavit signed by Subfranchisor stating that Subfranchisor is entitled to payment pursuant to this Agreement.
- (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.
- (C) Notwithstanding the above, if Franchisee fails to correct an alleged breach of this Agreement within the applicable time period after receipt of written notice from Subfranchisor, Subfranchisor will also have the right, upon written notice to Franchisee, to: (1) terminate the territorial exclusivity of the Protected Territory; or (2) reduce the size of the Protected Territory.
- (D) Nothing in this Section 16 will preclude Subfranchisor from seeking other remedies against Franchisee under state or federal laws or under this Agreement, including, but not limited to, recovery of attorneys' fees, punitive damages and injunctive relief.
**16.3.
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 is not the exclusive remedy for Franchisee default. The Subfranchisor has additional rights and remedies available.
Specifically, termination does not end any monetary obligations the Franchisee owes to Exit, the Subfranchisor, or the Brokers' Council. The Subfranchisor can still pursue the collection of fees or other amounts payable by the Franchisee under the agreement, enforce the agreement's provisions, sue for damages, seek injunctive relief, or pursue any other equitable remedy for breach of contract.
Moreover, the FDD states that the Subfranchisor can seek remedies against the Franchisee under state or federal laws, including recovery of attorneys' fees, punitive damages, and injunctive relief. If the agreement is terminated due to a Franchisee breach, the Subfranchisor can seek recovery from the Franchisee for damages sustained before the termination or in the future as a result of the breach. These damages can include the average monthly Continuing Fees for the 12 months before termination, multiplied by the number of months remaining until the original Expiration Date, which are considered liquidated damages.