Upon expiration or termination of the Exit Franchise Agreement, what is the Franchisee required to assign to the Subfranchisor at the Subfranchisor's request?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon expiration or termination of this Agreement for whatever reason, at Subfranchisor's request, Franchisee shall immediately assign to Subfranchisor all of its right, title, and interest in and to Franchise Agreements and Approved Supplier Agreements which have been entered into by Franchisee within the Protected Territory. In the event that Franchisee shall fail to execute individual assignments of the Franchise Agreements and Approved Supplier Agreements to Subfranchisor promptly upon expiration or termination of this Agreement, the parties agree that the provisions of this section shall in such instance be deemed to constitute an absolute assignment by Franchisee of all of its right, title, and interest in each such EXIT Realty Corp. Franchise Agreement and Approved Supplier Agreement to Subfranchisor or its designee.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, upon the expiration or termination of the Franchise Agreement, the franchisee is required to assign certain agreements to the subfranchisor if the subfranchisor requests it. Specifically, the franchisee must assign all rights, title, and interest in Franchise Agreements and Approved Supplier Agreements that the franchisee has entered into within the Protected Territory.
To ensure compliance, the agreement states that if the franchisee fails to execute individual assignments of these Franchise Agreements and Approved Supplier Agreements promptly upon expiration or termination, the provisions of this section will be deemed to constitute an absolute assignment by the franchisee. This means that the franchisee's rights and interests in those agreements automatically transfer to the subfranchisor or its designee, regardless of whether the franchisee actively signs them over.
This requirement ensures a smooth transition of business operations within the Protected Territory, allowing the subfranchisor to maintain relationships with franchisees and suppliers. For a prospective Exit franchisee, this means understanding that upon exiting the franchise system, they will need to transfer their existing agreements to the subfranchisor, or risk having those agreements automatically assigned.