Will City Wide's acceptance of payments waive any preceding breach of the City Wide agreement by the franchisee?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
of the new address for notice. Any notice to be given under this Agreement will be deemed to be given on the earliest of (i) five (5) business days after such notice is delivered, postage prepaid, for mailing by the United States Postal Service by certified mail, return receipt requested, (ii) two (2) business days after sent by overnight commercial delivery with all charges prepaid, or (iii) when it is actually received by the recipient.
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- 24.3 No failure of CITY WIDE to exercise any power reserved to it by this Agreement and no custom or practice of the parties at variance with the terms hereof shall constitute a waiver of CITY WIDE's right to demand exact compliance with any of the terms herein. No waiver or approval by CITY WIDE of any particular breach or default by Franchisee nor any delay, forbearance or omission by CITY WIDE to act or give notice of default or to exercise any power or right arising by reason of such default hereunder, nor acceptance by CITY WIDE of any payments due hereunder shall be considered a waiver or approval by CITY WIDE of any preceding or subsequent breach or default by Franchisee of any term, covenant or condition of this Agreement.
- 24.4 Whenever Franchisor reserves discretion in a particular area or where Franchisor agrees to exercise Franchisor's right reasonably or in good faith, Franchisor will satisfy Franchisor's obligations whenever Franchisor exercises reasonable business judgment ("Reasonable Business Judgment") in making Franchisor's decision or exercising Franchisor's rights. Franchisor's decisions or actions will be deemed to be the result of Reasonable Business Judgment, even if other reasonable or even arguably preferable alternatives are available, if Franchisor's decision or action is intended, in whole or significant part, to promote or benefit the System generally even if the decision or action also promotes Franchisor's financial or other individual interest.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, City Wide's acceptance of payments does not automatically waive any preceding breach or default by the franchisee of any term, covenant, or condition of the Franchise Agreement.
This means that even if a City Wide franchisee is in breach of the agreement (for example, by failing to meet certain performance standards or by violating operational guidelines), City Wide can still accept payments from the franchisee without giving up its right to take action regarding the prior breach. City Wide retains the right to address the breach separately, such as by issuing a notice of default or pursuing legal remedies. This protects City Wide's interests and ensures that it can enforce the terms of the franchise agreement even while continuing to receive payments.
This provision is designed to protect City Wide's ability to enforce the franchise agreement and maintain standards across its franchise system. It prevents franchisees from arguing that City Wide has implicitly condoned a breach simply by accepting payments. However, City Wide may provide a written waiver, which would need to be executed by the party sought to be charged. This waiver would not affect or impair City Wide's right with respect to any subsequent default of the same or of a different nature; nor will any delay, waiver, forbearance, or omission of City Wide to exercise any power or rights arising out of any breach or default by Franchisee of any of the terms, provisions, or covenants of this Agreement, affect or impair City Wide's rights nor will such constitute a waiver by City Wide of any right or of the right to declare any subsequent breach or default.