What actions can a City Wide franchisee take if litigation is not precluded by the franchise agreement?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.23 Notice of Legal Action.
Franchisee will notify CITY WIDE in writing within five (5) business days of receipt of service or notice of the commencement of any action, suit, or proceeding, and of the issuance of any order, writ, injunction, award, or decree of any court, agency, or other governmental instrumentality, including action against professional services/credentials of any employee or contractor associated with Franchisee, which may adversely affect the operation or financial condition of the Franchised Business.
Applicable Law and Attorney's Fees.
This Agreement will be governed by and construed in accordance with the laws of the State of Kansas.
Any action brought to enforce this Agreement, or any right granted in this Agreement will be brought in accordance with the dispute resolution provisions contained in the most current form of the Franchise Agreement between the Parties.
Should either party institute or participate in a legal or equitable proceeding against the other seeking to enforce or interpret this Agreement, the non-prevailing party in the proceeding will pay the prevailing party's costs (whether by final judgment or out of court settlement), expert and professional fees, and attorney's fees, including reimbursement of in-house counsel expenses at a reasonable rate comparable to fees generally charged in the legal community for outside counsel, and all costs and fees on appeal.
Said obligation of the nonprevailing party will be deemed to accrue on the date of commencement of such proceedings.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to the 2025 City Wide Franchise Disclosure Document, a franchisee must notify City Wide in writing within five business days of receiving notice of any legal action that may adversely affect the operation or financial condition of the franchised business. This includes any action, suit, or proceeding, as well as any order, writ, injunction, award, or decree from any court, agency, or governmental body. This also includes actions against professional services/credentials of any employee or contractor associated with the Franchisee.
This notification requirement ensures that City Wide is promptly informed of any legal challenges that could impact the franchise's operations or financial stability. By requiring franchisees to provide timely notice, City Wide can take appropriate steps to protect its interests and the interests of the franchise system as a whole. This may involve providing legal support to the franchisee, intervening in the legal proceedings, or taking other actions to mitigate any potential negative consequences.
Furthermore, the franchise agreement outlines that any action brought to enforce the agreement or any right granted within it will be subject to the dispute resolution provisions contained in the most current form of the Franchise Agreement between the parties. Should either party participate in a legal proceeding against the other seeking to enforce or interpret the agreement, the non-prevailing party will be responsible for paying the prevailing party's costs, including expert and professional fees, attorney's fees, and all costs and fees on appeal. This obligation accrues from the date the proceedings commence.