What is the effect of the California Franchise Relations Act on the City Publications franchise agreement?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
| FOR THE STATE OF CAL | IFORNIA |
|---|---|
| ---------------------- | --------- |
| Year ending December 31: | ||
|---|---|---|
| 2025 | $ 29,393 | |
| 2026 | 22,613 |
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- In recognition of the requirements of the California Franchise Investment Law, Cal. Corp. Code §§31000-31516 and the California Franchise Relations Act, Cal. Bus. And Prof. Code §§20000-20043, the Franchise Agreement for CITY PUBLICATIONS FRANCHISE GROUP, INC. shall be amended as follows:
- The California Franchise Relations Act provides rights to the Franchise concerning termination or nonrenewal of the Franchise Agreement, which may supersede provisions in the Franchise Agreement, specifically Sections 5.B and 19.
- Sections 5B.10 and 20B.2 of the Franchise Agreement require Franchisee to sign a general release as a condition of renewal and transfer of the franchise; such release shall exclude claims arising under California Franchise Investment Law and California Franchise Relations Act.
- Section 17A of the Franchise Agreement contains a covenant not to compete which extends beyond the expiration or termination of the Franchise Agreement; this covenant may not be enforceable under California law.
- Section 18B.1.h of the Franchise Agreement which terminates the Franchise Agreement upon the bankruptcy of the Franchisee may not be enforceable under federal bankruptcy law (11 U.S.C. Section 101, et seq.).
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications's 2025 Franchise Disclosure Document, the California Franchise Relations Act impacts the franchise agreement in several ways. The Franchise Agreement for City Publications will be amended to recognize the requirements of both the California Franchise Investment Law and the California Franchise Relations Act.
Specifically, the California Franchise Relations Act grants rights to franchisees regarding termination or nonrenewal of the Franchise Agreement, which may override certain provisions in the agreement, particularly Sections 5.B and 19. Additionally, any general release that a City Publications franchisee is required to sign as a condition of renewal or transfer must exclude claims arising under the California Franchise Investment Law and the California Franchise Relations Act.
Furthermore, the covenant not to compete in Section 17A of the Franchise Agreement, which extends beyond the termination or expiration of the agreement, may not be enforceable under California law. Similarly, the requirement to conduct litigation in Georgia, and the application of Georgia laws, might not be enforceable for causes of action arising under California law. Finally, the liquidated damages clause in Section 19E of the Franchise Agreement may be unenforceable under California Civil Code Section 1671, which governs the enforceability of such clauses.
Prospective City Publications franchisees in California should consult with legal counsel to fully understand the implications of these amendments and how California and federal laws apply to the franchise agreement.