Under what condition can the Subfranchisor unilaterally transfer the Exit agreement?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
This Agreement may be unilaterally transferred by Subfranchisor without the approval or consent of Franchisee with the consent of Franchisor. Any such transfer shall inure to the benefit of the transferee and Subfranchisor's interest in this Agreement shall automatically terminate on the date of the transfer.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the subfranchisor can unilaterally transfer the franchise agreement without the franchisee's approval or consent if the franchisor consents to the transfer. This means that Exit franchisees could have their agreement transferred to a new subfranchisor without their permission, provided Exit Realty Corp. approves the change.
This clause protects the subfranchisor's ability to exit the agreement, for example, if they sell their subfranchise rights to another party. The new subfranchisor would then assume the obligations and responsibilities outlined in the original franchise agreement.
For a prospective Exit franchisee, this highlights the importance of evaluating the financial stability and reputation of both the franchisor and the subfranchisor. While the franchisee initially enters into an agreement with the subfranchisor, the agreement can be transferred if the franchisor consents. This clause ensures that Exit retains control over who is subfranchising their brand and allows for changes in the subfranchise network without requiring the consent of each individual franchisee.