Does City Wide's control of the response to a Cyber Event entitle the City Wide Franchisee to damages?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
If a Cyber Event occurs, City Wide reserves the right, but shall not have any obligation, to perform and/or control and/or cause its third-party consultants to perform and/or control all aspects of the response to the Cyber Event including, without limitation, the investigation, containment and resolution of the Cyber Event and all communications.
City Wide's control of the response to a Cyber Event shall not create any liability for City Wide or additional rights for Franchisee, entitle Franchisee to damages or relieve Franchisee of Franchisee's indemnification obligations under Section 7.
Franchisee shall reimburse City Wide for all of City Wide's out-of-pocket costs and expenses incurred in responding to and remedying any Cyber Event if such Cyber Event is conclusively determined to have been caused solely by Franchisee or directly related to Franchisee's Franchised Business operations.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to the 2025 City Wide Franchise Disclosure Document, City Wide reserves the right to manage the response to a cyber event. However, City Wide's control over the response does not entitle the franchisee to damages.
Specifically, the FDD states that City Wide's control of the response to a Cyber Event does not create any liability for City Wide or additional rights for the franchisee. It also does not entitle the franchisee to damages or relieve the franchisee of their indemnification obligations. This means that even if City Wide takes control of managing a cyber event, the franchisee cannot seek damages from City Wide as a result of this control.
Furthermore, the franchisee may be responsible for reimbursing City Wide for all out-of-pocket costs and expenses incurred in responding to and remedying any Cyber Event if the Cyber Event is conclusively determined to have been caused solely by the franchisee or directly related to the franchisee's Franchised Business operations. This highlights the importance of the franchisee taking proactive measures to protect against cyber events and to comply with data privacy and security laws.