Exit barriers
Exit barriers are the economic, contractual, or operational obstacles that make leaving a market or discontinuing a product difficult and costly. They keep players competing even when profitability is insufficient.
In practice
A franchisee bound by a nine-year commercial lease and a remaining five-year franchise contract faces significant exit barriers: termination fees, loss of the entry fee, and a non-compete clause. For a SaaS, customer exit barriers are historical data, integrations, and the learning curve. Understanding these barriers helps assess how resilient a business model is when a sector-wide crisis hits.