Under what condition is a waiver by City Publications of a franchisee's default considered binding?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
No failure of Franchisor to exercise any power reserved to it hereunder, or to insist upon strict compliance by Franchisee with any obligation or condition hereunder, and no custom or practice of the parties in variance with the terms hereof, shall constitute a waiver of Franchisor's right to demand exact compliance with the terms hereof. Waiver by Franchisor of any particular default by Franchisee shall not be binding unless in writing and executed by the party sought to be charged and shall not affect or impair Franchisor's right with respect to any subsequent default of the same or of a different nature; nor shall any delay, waiver, forbearance or omission of Franchisor to exercise any power or rights arising out of any breach or default by Franchisee of any of the terms, provisions or covenants hereof, affect or impair Franchisor's rights nor shall such constitute a waiver by Franchisor of any right hereunder or of the right to declare any subsequent breach or default. Subsequent acceptance by Franchisor of any payment(s) due to it hereunder shall not be deemed to be a waiver by Franchisor of any preceding breach by Franchisee of any terms, covenants or conditions of this Agreement.
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, a waiver by City Publications of a franchisee's default is only considered binding if it meets specific requirements. The waiver must be in writing and executed by City Publications, meaning it must be a signed, written agreement.
This written waiver applies strictly to the particular default it addresses. It does not affect City Publications' rights regarding any other subsequent default, whether it's the same type of default or a different one. This means that even if City Publications waives a specific instance of a franchisee's failure to comply with the agreement, it doesn't give up its right to enforce the agreement in the future if the franchisee defaults again.
Furthermore, any delay, forbearance, or omission by City Publications in exercising its rights after a breach by the franchisee does not constitute a waiver of those rights. Similarly, City Publications' acceptance of payments from the franchisee does not mean it has waived any prior breach of the franchise agreement. This ensures that City Publications retains its ability to enforce the franchise agreement despite any leniency it might show in specific situations.
This type of non-waiver clause is common in franchise agreements to protect the franchisor's rights and ensure consistent enforcement of the agreement's terms. Prospective City Publications franchisees should understand that any waivers must be documented in writing to be effective and that past waivers do not set a precedent for future defaults.