According to the City Wide franchise agreement, what is the franchisee obligated to do?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
pursuant to this Agreement, including the right to operate the Franchised Business, until such programs have been satisfactorily completed, as determined by CITY WIDE at its sole and absolute right, regardless of whether or not CITY WIDE has exercised its right to terminate pursuant to Section 14.1.6. Franchisee further agrees that all sales representatives and facility services managers employed by Franchisee will attend all requisite training programs at CITY WIDE's home office.
7.15 Revenue and Profit Maximization; Budget and Strategic Plan. Franchisee will always use Franchisee's best efforts to diligently operate the Franchised Business so as to maximize the revenues and profits and will do all things reasonably requested by CITY WIDE to maximize revenues and profits. Franchisee always agrees and covenants to comply with CITY WIDE's minimum staffing requirements as set forth in the Operating Manual. Franchisee acknowledges and agrees that Franchisee's failure to comply with this requirement shall constitute a material default of this Agreement for which CITY WIDE may terminate this Agreement or: (a) reduce Franchisee's Designated Territory size; (b) reduce the number of field visits that CITY WIDE provides to Franchisee during the Agreement; (c) require Franchisee to attend additional training at Franchisee's expense; (d) prohibit Franchisee from attending any annual conference, convention, or training session that CITY WIDE may periodically conduct; (e) deem Franchisee ineligible for any awards bestowed upon franchisees by CITY WIDE and (f) reduce or eliminate the level of support and services CITY WIDE provides to Franchisee. Franchisee agrees to complete and submit to CITY WIDE on an annual basis a budget and strategic business plan before the end of Franchisee's fiscal year via CITY WIDE's budgeting platform. In the event CITY WIDE exercises its right in 7.15(a) above, the portion of the Designated Territory that is no longer part of the Designated Territory ("Eliminated Portion") may be granted by CITY WIDE to another franchisee to develop, own and operate a franchised business. If CITY WIDE grants the Eliminated Portion to another franchisee, Franchisee acknowledges and agrees that Franchisee's duties and obligations under this Agreement relating to operating the Franchised Business in the remaining part of the Designated Territory will continue in full force and effect so long as this Agreement is in effect. Notwithstanding the above, CITY WIDE will provide Franchisee with a period not to exceed one (1) year to cure the breach in 7.15(a).
Franchisee acknowledges and agrees there exists a direct correlation between sales staffing and the financial success of a Franchised Business. Accordingly, Franchisee is required to meet the minimum staffing levels as set forth in the Operating Manual.
- 7.16 Promotions. Franchisee will use only business stationery, business cards, marketing materials, advertising materials, printed materials, and forms which have been supplied by a supplier designated or approved by CITY WIDE pursuant to Section 7.9 of this Agreement and which meet all standards of quality and other specifications of CITY WIDE. Franchisee will not employ any person to act as a representative of Franchisee in connection with the local promotion of the Franchised Business in any public media without the prior written approval of CITY WIDE. Franchisee will submit to CITY WIDE in a timely manner, all promotional and advertising materials to be used by Franchisee, which must be approved by CITY WIDE before their use. Such submission will give CITY WIDE a minimum of seven (7) business days to review and approve such material. If CITY WIDE does not respond to Franchisee's request within that time, Franchisee's proposed materials will be deemed disapproved.
- 7.17 Independent Ownership. In all advertising displays and materials used in the Franchised Business and in Franchisee's Designated Territory, Franchisee will, in such form and manner as may be
specified by CITY WIDE in the Operating Manual, notify the public that Franchisee is independently owned and is operating the business licensed under this Agreement as a franchisee of CITY WIDE and will identify Franchisee's Location in the manner specified by CITY WIDE in the Operating Manual.
- 7.18 Marketing Efforts. Franchisee will at all times actively promote the sale of System products and services at the Location and will use Franchisee's primary and best efforts to cultivate, develop, and expand the market for such products and services. Franchisee must participate in and cooperate in any marketing or promotional campaigns conducted by CITY WIDE unless Franchisee obtains prior written approval from CITY WIDE to opt out of any such campaign.
- 7.19 Total Revenue Retention Requirement. The total revenue retention of Franchisee's Franchised Business must not fall below seventy-seven and five-tenths percent (77.5%) for any rolling twenty-four (24) month period for Franchisee's Business ("Minimum Total Revenue Retention Requirement"), as determined by CITY WIDE in its sole and absolute discretion. Franchisee acknowledges and agrees that Franchisee's failure to comply with the Minimum Total Revenue Retention Requirement shall constitute a material default of this Agreement for which CITY WIDE may terminate this Agreement.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, franchisees have several obligations under the franchise agreement. These obligations cover various aspects of operating the franchise, including maximizing revenue and profits, adhering to operational standards, and fulfilling financial responsibilities.
City Wide franchisees must diligently operate their franchised business to maximize revenues and profits, complying with the franchisor's minimum staffing requirements outlined in the Operating Manual. Failure to meet these staffing levels can result in penalties such as a reduction in territory size, fewer field visits from City Wide, mandatory additional training at the franchisee's expense, ineligibility for awards, and reduced support from City Wide. Franchisees are also required to submit an annual budget and strategic business plan through City Wide's budgeting platform.
Franchisees must operate their business in full compliance with the standards, specifications, requirements, and instructions set forth in the franchise agreement and the City Wide Operating Manual. They must also meet all monetary obligations to City Wide and its subsidiaries or affiliates in a timely manner. Additionally, franchisees are expected to maintain the highest standards of quality, cleanliness, appearance, and service to uphold the public image and reputation of the City Wide system.
In the event of a default, if the franchisee fails to cure the breach within the allotted time, City Wide has the option to enter the premises and take over the operation of the business until the default is resolved. The franchisee is responsible for paying a service fee of at least $300 per day, plus all associated travel and lodging expenses incurred by City Wide's representative during this period. Upon termination of the agreement due to an uncured breach by the franchisee, the franchisee will forfeit any rights to royalty rebates.