What compliance standards must a City Wide franchisee meet to be eligible for a Successor Term?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
2.2.5 Franchisee must not be in default of any provision of this Agreement, any amendment to this Agreement, or any other agreement between CITY WIDE or its respective subsidiaries or affiliates, and at all times Franchisee must have substantially complied with all the terms and conditions of this Agreement and any other agreements between the parties during the respective Terms, including but not limited to then current Annual Revenue Per Capita Growth requirement (See Section 6.5).
2.2.6 Franchisee's operation of the Franchised Business must be in full compliance with the standards, specifications, requirements, instructions set forth in this Agreement and in the Operating Manual of CITY WIDE.
2.2.7 Franchisee's operations under all other Franchise Agreements, if any, must be in full compliance with the standards, specifications, requirements, instructions set forth under all other Franchise Agreements and in the Operating Manual of CITY WIDE.
2.2.8 Franchisee must have satisfied all monetary obligations Franchisee owes to CITY WIDE and its subsidiaries and affiliates and timely met such obligations throughout the respective Term.
2.2.9 Franchisee must execute the form of franchise agreement being used by CITY WIDE at the time Franchisee renews, including the Successor Addendum (See Attachment J) (collectively, "Successor Franchise Agreement"), which Successor Franchise Agreement will in all respects supersede this Agreement and the terms of which may differ from the terms of this Agreement, including, without limitation, a higher percentage Royalty Fee (See Section 3.7.1) and Marketing Fee (See Section 3.7.2(a).
2.2.10 Franchisee must pay CITY WIDE a renewal fee ("Successor Fee") equal to fifty percent (50%) of the then-current Initial Franchise Fee set forth in the Franchise Disclosure Document , at the time Franchisee executes the Successor Franchise Agreement which amount will be instead of payment of a new Initial Franchise Fee.
2.2.11 Franchisees must comply with CITY WIDE's then-current criteria for operating a Franchised Business, including CITY WIDE's then-current franchisee qualification and training requirements.
2.2.12 Franchisee must execute a general release, in a form CITY WIDE prescribes, releasing any claims against CITY WIDE or its subsidiaries, affiliates, officers, directors, agents, and employees which Franchisee may have or assert at time of renewal; and
2.2.13 Franchisee must present evidence satisfactory to CITY WIDE that Franchisee has the right to remain in possession of the Location of the Office (See Item 12) for the Term, or a mutually acceptable alternative Location.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, several compliance standards must be met to be eligible for a Successor Term. A franchisee must not be in default of any agreement with City Wide or its affiliates and must have substantially complied with all terms and conditions of all agreements during the current term. This includes meeting the then-current Annual Revenue Per Capita Growth requirement. The franchisee's operation must be in full compliance with the standards, specifications, requirements, and instructions set forth in the Franchise Agreement and the City Wide Operating Manual. If the franchisee operates under other franchise agreements with City Wide, those operations must also be in full compliance.
To be eligible for a Successor Term, a City Wide franchisee must have satisfied all monetary obligations to City Wide and its subsidiaries and affiliates, ensuring timely payments throughout the current term. The franchisee must also execute the current form of the franchise agreement, including the Successor Addendum, which may contain different terms, such as higher royalty and marketing fees. A Successor Fee, equal to fifty percent (50%) of the then-current Initial Franchise Fee, must be paid when the Successor Franchise Agreement is executed, instead of paying a new Initial Franchise Fee.
Furthermore, the City Wide franchisee must comply with City Wide's then-current criteria for operating a franchised business, including qualification and training requirements. The franchisee must execute a general release, releasing any claims against City Wide and its related parties. Finally, the franchisee must provide satisfactory evidence of the right to remain in possession of the office location for the term, or secure a mutually acceptable alternative location. These conditions ensure that franchisees seeking a Successor Term continue to meet City Wide's standards and maintain the integrity of the franchise system.