What are the owners of a City Publications franchise personally liable for?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
To simplify the language in this Disclosure Document, the words "we", "us" or "our" mean the franchisor, CITY PUBLICATIONS FRANCHISE GROUP, INC. The word "you" means the person to whom we award the franchise. If you are a corporation, partnership, limited liability company or other business entity, certain provisions of this Disclosure Document also apply to your owners and will be noted.
Franchisee acknowledges that the restrictive covenants contained in Section 17 are essential elements of this Agreement
and that without their inclusion, Franchisor would not have entered into this Agreement. Franchisee agrees that each of the terms set forth herein, including the restrictive covenants, is fair and reasonable, and are reasonably required for the protection of Franchisor and the Franchise System.
As any breach by Franchisee of any of the covenants contained in this Section would result in irreparable injury to Franchisor, and as the damages arising out of any such breach would be difficult to ascertain, Franchisee agrees that, in addition to all other remedies provided by law or in equity, Franchisor, in the event of a breach or threatened breach of the covenants herein contained, shall be entitled to seek immediate equitable remedies including, but not limited to, restraining orders, preliminary and permanent injunctions in order to prevent Franchisee, its partners, members, officers, directors or employees from continuing to breach the covenants contained in this Section 17.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 25–26)
What This Means (2025 FDD)
Based on the 2025 City Publications Franchise Disclosure Document, if a franchisee operates as a corporation, partnership, limited liability company, or other business entity, certain provisions of the disclosure document also apply to the owners. While the document does not explicitly detail what owners are personally liable for, it does state that franchisees acknowledge that the restrictive covenants are essential elements of the agreement. These covenants include restrictions on operating a competitive business within the exclusive territory or near other City Publications businesses, hiring employees from the City Publications system, and soliciting business from former customers.
Specifically, Section 17 outlines restrictions that, if breached, could result in irreparable injury to City Publications. In such cases, City Publications is entitled to seek immediate equitable remedies, including restraining orders, preliminary and permanent injunctions, to prevent the franchisee, its partners, members, officers, directors, or employees from continuing to breach the covenants. This suggests that owners could be held liable for breaches of these restrictive covenants.
Prospective City Publications franchisees should carefully review Section 17 of the franchise agreement, as referenced in Item 23, to fully understand the restrictive covenants and potential liabilities. It is also advisable to consult with a legal professional to clarify the extent to which owners or partners may be personally liable for the business's obligations and any breaches of the franchise agreement.