Are failures to pay an Affiliate of City Publications treated the same as failures to pay City Publications directly?

According to City Publications' 2025 Franchise Disclosure Document, the franchise agreement defines an "Affiliate" as any business entity that controls, is controlled by, or is under common control with City Publications. The document also states that the franchisee shall promptly pay all sums owing to City Publications. In the event of termination for any default of the franchisee, such sums shall include, but not be limited to, all damages, costs and expenses, including reasonable attorneys' fees and other expenses incurred by City Publications as a result of the default.

While the FDD specifies the definition of an 'Affiliate' and the franchisee's obligation to pay sums to City Publications, it does not explicitly state whether failure to pay an affiliate is treated the same as failure to pay City Publications directly. However, given the definition of 'Affiliate' as an entity under common control with City Publications, it is highly probable that non-payment to an affiliate would be viewed seriously by City Publications.

In practical terms, this means a City Publications franchisee should consider payments to affiliates with the same importance as payments directly to the franchisor. Failure to pay could potentially lead to default and termination of the franchise agreement, with the associated financial consequences.

To fully clarify this issue, a prospective franchisee should seek explicit confirmation from City Publications regarding the treatment of payments to affiliates. Specifically, they should ask whether failure to pay an affiliate would constitute a breach of the franchise agreement and carry the same penalties as non-payment to City Publications itself.