factual

Does the City Publications franchise agreement create a partnership between the franchisor and franchisee?

City_Publications Franchise · 2025 FDD

Answer from 2025 FDD Document

[Item 23: RECEIPT]

A. Restriction During Term of Agreement

Franchisee covenants that, except as otherwise approved in writing by Franchisor, neither Franchisee nor any partner(s), officer(s), director(s), member(s), executives, professional staff or sales staff or the spouses of any of the foregoing shall, during the term hereof, either directly or indirectly, for itself or through, on behalf of or in conjunction with, any person, persons, partnership, corporation, limited liability company or other entity:

    1. Own an interest in, manage, operate, be employed, in a sales or management capacity, by, or act as a consultant to any Competitive Business anywhere;
    1. Initiate any action to hire, or attempt to hire for any other employer, any person who is employed by Franchisor or employed by any other franchisee of the CITY PUBLICATIONS System, or induce any such person to leave his employment with Franchisor or any other franchisee in order to work for any other employer, whether or not the person's employment with the business is pursuant to a written agreement or is at will; or
    1. Divert business of customers of the Franchised Business or other Franchisor or franchisee-owned CITY PUBLICATIONS Businesses to any Competitive Business.

B. Restriction After Termination

Franchisee covenants that, except as otherwise approved in writing by Franchisor, neither Franchisee nor any partner(s), officer(s), director(s), member(s), executives, or professional staff or sales staff or their spouses of any of the foregoing shall for a period of two (2) years after the expiration or termination of this Agreement regardless of the cause, either directly or indirectly, for itself or through, on behalf of or in conjunction with, any person, persons, partnership, corporation, limited liability company or other entity:


[Item 23: RECEIPT]

"Franchisee" means the individual or entity defined as "Franchisee" in the introductory paragraph of this Agreement, and such term includes all holders of a legal or beneficial interest in Franchisee, and if Franchisee is a business entity, such term shall also include all partners of the entity (if the entity is a partnership); all shareholders, officers and directors of the entity (if the entity is a corporation); and all members and managers of the entity (if the entity is a limited liability company); and any trustee (if the entity is a business trust) as of the Effective Date of this Agreement, or which are appointed as such at any time during the term of this Agreement. By Franchisee's signature hereto, all partners, shareholders, officers, directors, members, managers and trustees as of the Effective Date of this Agreement, or which are appointed as such at any time during the term of this Agreement, acknowledge and accept the duties and obligations imposed upon each of them, individually, by the terms of this Agreement;

Source: Item 23 — RECEIPT (FDD pages 39–129)

What This Means (2025 FDD)

Based on the 2025 City Publications Franchise Disclosure Document, the franchise agreement does not establish a partnership between the franchisor and franchisee. While the term 'partner' appears in the document, it is used within the context of restrictions and obligations placed upon the franchisee and its associates, not to define a formal business partnership. Specifically, the agreement outlines restrictions on the franchisee and their partners regarding involvement in competitive businesses, both during and after the term of the agreement. These restrictions are designed to protect City Publications' interests and maintain the integrity of its franchise system.

The FDD defines 'Franchisee' to include, if the franchisee is a business entity, all partners of the entity (if the entity is a partnership). The document clarifies that all partners, shareholders, officers, directors, members, managers and trustees acknowledge and accept the duties and obligations imposed upon them individually by the terms of the agreement. This indicates that while individuals associated with the franchisee entity are bound by the agreement, it does not create a partnership between the franchisee and City Publications.

The franchise agreement emphasizes the franchisor-franchisee relationship as a licensing agreement, granting the franchisee the right to operate a City Publications business under the franchisor's system and marks. The agreement outlines the scope of the license, including the grant of an exclusive territory and the franchisor's rights to maintain control over the marks and the system. These elements are characteristic of a franchise relationship rather than a partnership, where both parties typically share in the business's profits, losses, and management decisions. Therefore, prospective franchisees should understand that they are entering into a franchisor-franchisee relationship with specific rights and obligations, not a partnership.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.