What constitutes 'routine litigation incidental to the business' that City Wide considers acceptable?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.22 Best Interest of the System.
Franchisee will not engage in any activity, conduct or practice that is contrary to the best interest of CITY WIDE or Franchisee or that is reasonably anticipated to result in litigation with Franchisee's suppliers or customers, or in public criticism of CITY WIDE or the Franchised Business generally.
- 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.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
Based on the 2025 City Wide Franchise Disclosure Document, there is no definition of what City Wide considers 'routine litigation incidental to the business.' However, the FDD does state that the franchisee must notify City Wide in writing within five business days of any legal action that may adversely affect the operation or financial condition of the franchise. This includes any action, suit, or proceeding, and any order, writ, injunction, award, or decree from a court or governmental agency, including actions against the professional credentials of any employee or contractor associated with the franchisee.
While the FDD does not define 'routine litigation,' it emphasizes the franchisee's responsibility to avoid activities that could lead to litigation with suppliers or customers or public criticism of City Wide. The franchisee is expected to operate in the best interest of the City Wide system, suggesting that any litigation deemed detrimental to the brand or other franchisees would not be considered acceptable.
To fully understand what City Wide considers 'routine litigation incidental to the business' and what types of legal issues might be acceptable, a prospective franchisee should ask City Wide for specific examples and clarification during their due diligence process. Understanding this threshold is crucial for assessing the potential legal risks and costs associated with operating a City Wide franchise.