In Michigan, does the City Publications franchise agreement require compensation for personalized materials upon non-renewal?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
◼ A provision that permits a Franchisor to refuse to renew a franchise without fairly compensating the Franchisee by repurchase or other means for the fair market value at the time of expiration of the Franchisee's inventory, supplies, equipment, fixtures and furnishings. Personalized
materials which have no value to the Franchisor and inventory, supplies, equipment, fixtures and furnishings not reasonably required in the conduct of the franchise business are not subject to compensation. This subsection applies only if: (a) the term of the franchise is less than 5 years, and (b) the Franchisee is prohibited by the franchise or other agreement from continuing to conduct substantially the same business under another trademark, service mark, trade name, logotype, advertising or other commercial symbol in the same area subsequent to the expiration of the franchise or the Franchisee does not receive at least 6 months advance notice of Franchisor's intent not to renew the franchise.
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, Michigan law addresses compensation for franchisees upon non-renewal of their franchise agreement. Specifically, it addresses the repurchase of inventory, supplies, equipment, fixtures, and furnishings.
The FDD states that City Publications is not required to compensate a franchisee for personalized materials that have no value to the franchisor, or for inventory, supplies, equipment, fixtures, and furnishings not reasonably required in the conduct of the franchise business. This protection for franchisees only applies if the franchise term was less than five years, and the franchisee is either prohibited from continuing a similar business in the same area under a different brand after the franchise expires, or the franchisee did not receive at least six months' advance notice that City Publications would not be renewing the franchise agreement.
This means that if a City Publications franchise in Michigan has a term of five years or longer, or if the franchisee is allowed to continue a similar business after the franchise term, or if the franchisee receives at least six months notice of non-renewal, then the franchisor may not be required to compensate the franchisee for inventory, supplies, equipment, fixtures, furnishings, or personalized materials upon non-renewal. Therefore, prospective franchisees in Michigan should carefully consider the term of the franchise agreement and the conditions under which non-renewal compensation is mandated to understand their rights and potential financial implications.