Within which geographic area is an Exit franchisee prohibited from engaging in the business of selling, managing, or servicing real estate franchise organizations after termination?

According to Exit's 2025 Franchise Disclosure Document, a franchisee is restricted from engaging in the business of selling, managing, or servicing real estate franchise organizations within the state(s) where their Protected Territory is located. This restriction applies for one year following the termination, assignment, or expiration of the Franchise Agreement. This post-term covenant not to compete is irrespective of whether services are provided directly to the franchising operations or to Exit's franchisees.

This means that if a franchisee's Protected Territory is in California, they cannot own, operate, lease, franchise, conduct, engage in, be connected with, have any interest in, or assist any entity involved in selling, managing, or servicing real estate franchises anywhere in California for one year after leaving the Exit system. This restriction is in place to protect Exit's business model and franchise network within that state.

It is important to note that this covenant applies to the franchisee, their shareholders, partners, members, directors, officers, and guarantors. This broad application ensures that those closely associated with the franchise are also prevented from competing in the specified manner. Prospective franchisees should carefully consider the implications of this post-term covenant, especially if they have future plans to engage in real estate franchise activities within the same state after their Exit franchise agreement ends.