What specific changes can City Publications reasonably request to the business premises upon termination or expiration of the agreement?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
he telephone service provider and all listing agencies of the termination or expiration of Franchisee's rights to use any telephone number or any telephone directory listings associated with the "CITY PUBLICATIONS" name or any of the Marks and shall authorize transfer of the same to Franchisor or at Franchisor's direction.
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- Franchisor shall have the right to enter any premises leased for the Franchised Business. Additionally, upon demand by Franchisor, Franchisee shall assign (or, if an assignment is prohibited, sublease for the full remaining term and on the same terms and conditions as Franchisee's lease) its interest in the lease then in effect for the premises of the Franchised Business to Franchisor, and Franchisee shall furnish Franchisor with evidence satisfactory to Franchisor of compliance with this obligation within thirty (30) days after termination or expiration of this Agreement. Franchisor shall have the right to make rental and other payments directly to the landlord or other party to whom such payment is ultimately due.
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- 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.
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- Franchisee shall pay to Franchisor all damages, costs and expenses, including reasonable attorneys' fees, incurred by Franchisor subsequent to the termination or expiration of the Franchise herein granted in obtaining injunctive or other relief for the enforcement of any provisions of this Section 19.
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Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, upon termination or expiration of the franchise agreement, City Publications has specific rights regarding the business premises. City Publications retains the right to enter any premises leased for the Franchised Business. Additionally, upon demand by City Publications, the franchisee must assign their interest in the lease to City Publications, or if assignment is prohibited, sublease the premises for the full remaining term under the same conditions. The franchisee must provide satisfactory evidence of compliance with this obligation within 30 days of termination or expiration. City Publications also has the right to make rental and other payments directly to the landlord.
This means that if a City Publications franchisee leases a location for their business, the franchise agreement allows City Publications to take over that lease under certain conditions. This could occur if the franchisee defaults or upon termination or expiration of the agreement. The franchisee is responsible for ensuring the lease allows for assignment or subleasing to City Publications.
This provision protects City Publications by ensuring they can maintain a presence in a particular market even if an individual franchise terminates. For a prospective franchisee, this highlights the importance of negotiating lease terms that allow for assignment or subleasing to protect themselves from potential liabilities should City Publications exercise its option to take over the lease. The franchisee is responsible for the expense of changes required by City Publications to the premises, which they must pay upon demand.
Furthermore, City Publications has the option to purchase the assets of the franchised business, including leasehold improvements, equipment, and inventory, at the franchisee's cost or fair market value (whichever is less), without accounting for goodwill. This option must be exercised within 30 days of termination or expiration. City Publications can also offset any amounts owed by the franchisee against the purchase price. These factors should be carefully considered by potential franchisees.