Under what conditions can the landlord terminate Exit's office lease agreement?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
The lease agreement contains the landlord's option to terminate the current lease if the premises are: (i) rendered wholly untenantable, or (ii) damaged as a result of any cause which is not covered by insurance then in full force and effect naming the landlord as the insured, or (iii) damaged or destroyed in whole or in part during the last two lease years, or (iv) if the building in which the premises are located is damaged to the extent of 50% or more of the landlord's gross leasable area, then, in any such event, the landlord may elect to terminate the lease by giving the Company notice of such election within 120 days after the occurrence of such an event.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the landlord of Exit's office space in Lakeville, Minnesota, has the option to terminate the lease agreement under specific circumstances. These circumstances include situations where the premises are rendered wholly untenantable, or if the premises are damaged due to causes not covered by the landlord's insurance policy.
Additionally, the landlord can terminate the lease if the premises are damaged or destroyed in whole or in part during the last two years of the lease. Another condition that allows the landlord to terminate the lease is if the building where the premises are located sustains damage amounting to 50% or more of the landlord's gross leasable area.
In any of these events, the landlord must provide Exit with a notice of election to terminate the lease within 120 days after the event occurs. The original lease agreement commenced on April 3, 2017, and is set to expire on February 29, 2028. The monthly rent ranges from $3,754 to $6,760, with additional charges for operating expenses and taxes. The lease also included a build-out incentive of $322,000, which was amortized over the lease's life.