What happens if a City Publications franchisee fails to pay for purchases from the Franchisor?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
If franchisee fails to do the required five mailings, Franchisee owes Franchisor $2,500 per zone for each mailing missed. If Franchisee fails to pay that amount upon receipt of billing for same, Franchisor can terminate this Agreement.
Franchisee fails or refuses to comply with any other provision of this Agreement, or any mandatory specification, standard or operating procedure prescribed in the Manual or otherwise in writing, and does not correct such failure within thirty (30) days or provide proof acceptable to Franchisor that Franchisee has made all reasonable efforts to correct such failure and shall continue to make all reasonable efforts to cure until a cure is effected; if such failure cannot reasonably be corrected within thirty (30) days after written notice of such failure to comply is delivered to Franchisee.
Franchisee shall promptly pay all sums owing to Franchisor.
In the event of termination for any default of Franchisee, such sums shall include, but not be limited to, all damages, costs and expenses, including reasonable attorneys' fees and other expenses incurred by Franchisor as a result of the default.
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, failure to pay the franchisor can lead to termination of the franchise agreement under specific circumstances. One such instance is related to the annual minimum performance requirements. If a franchisee fails to generate the required number of 50,000 circulation card packs in each zone, they owe City Publications $2,500 per zone for each mailing missed. Should the franchisee fail to pay this amount after receiving a bill, City Publications has the right to terminate the agreement.
Additionally, the FDD states that if a franchisee fails to comply with any provision of the agreement, or any mandatory specification, standard, or operating procedure, and does not correct such failure within thirty days after written notice, City Publications may terminate the agreement. This includes failure to pay sums owed to City Publications. In the event of termination due to the franchisee's default, the franchisee is liable for all damages, costs, and expenses, including reasonable attorneys' fees, incurred by City Publications as a result of the default.
In practical terms, a City Publications franchisee needs to maintain diligent financial records and ensure timely payments to avoid potential penalties or termination of their franchise agreement. The franchisee should also be aware of the minimum performance requirements and the associated costs for failing to meet them. It is important to note that the franchisor can seek legal remedies, including injunctions, for breaches of the franchise agreement, which could further increase the franchisee's financial burden.