Can City Wide agree to an alternative arrangement to direct ownership by the manager?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) Manager must own at least a twenty percent (20%) interest in Franchised Business (if Franchisee is an entity, Manager must own twenty percent (20%) of the entity that owns the Franchised Business); provided however, that CITY WIDE may agree to an alternative arrangement (other than direct ownership by the Manager) in exceptional circumstances.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, under normal circumstances, if a franchisee designates a manager, that manager must own at least 20% interest in the franchised business. If the franchisee is an entity, the manager must own 20% of the entity that owns the City Wide franchise.
However, City Wide may agree to an alternative arrangement other than direct ownership by the manager in exceptional circumstances. The FDD does not define what constitutes "exceptional circumstances," so a prospective franchisee should seek clarification from City Wide on what situations might qualify for an alternative arrangement.
It is important to note that the manager must still meet other requirements, such as meeting City Wide's criteria for approving new franchisees, having the necessary experience to operate the franchised business, living in the designated territory, and devoting full-time effort to supervising the business daily.