Is there an exception to the abandonment rule for City Publications franchisees, and if so, what is it?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee covenants that, except as otherwise approved in writing by Franchisor, neither Franchisee nor any partner(s), officer(s), director(s), member(s), executives, or professional staff or sales staff or their spouses of any of the foregoing shall for a period of two (2) years after the expiration or termination of this Agreement regardless of the cause, either directly or indirectly, for itself or through, on behalf of or in conjunction with, any person, persons, partnership, corporation, limited liability company or other entity:
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- Own an interest in, manage, operate, be employed, in a sales or management capacity, by, or act as a consultant to any Competitive Business anywhere within the Exclusive Territory granted to Franchisee, or within a radius of twenty-five (25) miles of any other Franchisor or franchisee-owned CITY PUBLICATIONS Business;
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- Initiate any action to hire, or attempt to hire for any other employer, any person who is employed by Franchisor or employed by any other franchisee of the CITY PUBLICATIONS System, or induce any such person to leave his employment with Franchisor or any other franchisee in order to work for any other employer, whether or not the person's employment with the business is pursuant to a written agreement or is at will; or
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- Solicit business from customers of Franchisee's former CITY PUBLICATIONS business or other Franchisor or franchisee-owned CITY PUBLICATIONS Businesses.
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
The 2025 City Publications Franchise Disclosure Document (FDD) outlines restrictions during and after the franchise term, but it does not explicitly detail an 'abandonment rule' or any specific exceptions to such a rule. However, the FDD does state that the restrictions on franchisees after termination do not apply if otherwise approved in writing by City Publications.
Specifically, during the term of the agreement, franchisees are restricted from engaging in competitive businesses, hiring employees of City Publications or other franchisees, or diverting business to competitive entities. These restrictions apply to the franchisee, their partners, officers, directors, members, executives, professional staff, sales staff, and their spouses. After the agreement terminates, these restrictions continue for two years, unless City Publications provides written approval otherwise.
Without a clearly defined abandonment rule in the provided FDD excerpts, it's important for potential franchisees to directly ask City Publications about the conditions under which a franchise could be considered abandoned, and what the consequences of abandonment would be. Understanding these terms is crucial before entering into a franchise agreement to avoid potential penalties or loss of investment.