Does City Publications provide or withhold material benefits based on whether franchisees purchase through designated or approved sources?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
We do not provide or withhold material benefits to you (such as renewal rights or the right to open additional Franchised Businesses) based on whether or not you purchase through the sources we designate or approve, however, purchases of unapproved products or from unapproved suppliers in violation of the Franchise Agreement will entitle us, among other things, to terminate the Franchise Agreement.
We and our Affiliates have developed certain proprietary items and services, including customized direct mail Card Packs, customized Specialty Programs, SEO Programs, Graphics Services for the art design and printing of direct mail card packs, target market mailing lists, lead generation, packaging, branding materials, and other items which are integral to the operation of CITY PUBLICATIONS Businesses ("Proprietary Products & Services"). You must order and purchase all of your requirements of Proprietary Products & Services exclusively from us, our Affiliate(s) or a supplier designated by us. We do not allow you to contract with alternative suppliers for these items and therefore do not have a procedure by which you would submit to us information regarding alternative suppliers. Because we do not allow use of alternative suppliers for these services, you will never pay us for such a review, and there is no stated time frame within which we would be responding.
In the year that ended on December 31, 2024, we, through our affiliate, derived $310,380 from the sale of Proprietary Products & Services to franchisees, which constituted approximately 23% of our total 2024 revenue of $1,413,271.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 16–18)
What This Means (2025 FDD)
According to City Publications's 2025 Franchise Disclosure Document, City Publications does not provide or withhold material benefits, such as renewal rights or the right to open additional franchised businesses, based on whether a franchisee purchases through designated or approved sources. However, non-compliance with the Franchise Agreement through the purchase of unapproved products or from unapproved suppliers can lead to termination of the Franchise Agreement.
City Publications does require franchisees to purchase certain proprietary products and services exclusively from City Publications, its affiliates, or designated suppliers. These proprietary items include customized direct mail Card Packs, customized Specialty Programs, SEO Programs, Graphics Services for the art design and printing of direct mail card packs, target market mailing lists, lead generation, packaging, and branding materials. City Publications does not allow franchisees to contract with alternative suppliers for these items.
While franchisees are required to purchase proprietary products from approved sources, City Publications commits to providing these products and services at competitive prices. In 2024, City Publications, through its affiliate, derived $310,380 from the sale of Proprietary Products & Services to franchisees, which constituted approximately 23% of their total 2024 revenue of $1,413,271. This indicates the importance of these proprietary products to City Publications's revenue stream.
Prospective franchisees should be aware that while there are no explicit benefits tied to purchasing from approved sources, failing to do so can result in serious consequences, including termination of the franchise agreement. The reliance on City Publications or its affiliates for proprietary products also means franchisees are dependent on the franchisor for these essential business components.