What was the date of the definitive settlement agreement between Dauntless, Ayers, and City Wide?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
Dauntless Enterprises, Inc. and Kenneth Ayers v. City Wide Franchise Company, Inc. (United States District Court for the District of Kansas, Case No. 2:23-cv-02273, filed June 16, 2023). Dauntless Enterprises, Inc., a CITY WIDE franchisee ("Dauntless"), and Kenneth Ayers, its owner ("Ayers"), filed this suit against CITY WIDE seeking a preliminary injunction in connection with the expiration of Dauntless' franchise agreement. Plaintiffs alleged that Dauntless satisfied each of the renewal conditions set forth in the franchise agreement with CITY WIDE and was therefore entitled to a 10-year renewal term of the franchise agreement. CITY WIDE disagreed that Dauntless satisfied all renewal conditions (although CITY WIDE had agreed provide a step-up renewal if Dauntless met certain financial and operational milestones). In their Complaint, plaintiffs alleged breach of contract against CITY WIDE and further sought to enjoin CITY WIDE from: (i) refusing to renew Dauntless' franchise agreement and (ii) terminating the franchise agreement upon the expiration of the initial 15-year term on June 19, 2023, pending a final ruling on plaintiffs' claims in arbitration. CITY WIDE opposed plaintiff's motion for preliminary injunction. On or around June 22, 2023, Dauntless and Ayers filed a demand for arbitration alleging breach of contract and breach of the covenant of good faith and fair dealing, seeking to require CITY WIDE to specifically perform the franchise agreement by entering into a new franchise agreement for a 10-year term. The parties settled all claims on July 7, 2023. Under a definitive settlement agreement dated July 28, 2023, the parties extended the initial term of the franchise agreement through December 31, 2026 (the "2026 Calendar Year") and provided Dauntless with the option to obtain a successor term from January 1, 2027, through April 3, 2033, if Dauntless satisfies certain renewal conditions. The renewal conditions vary depending on the amount of Gross Sales that Dauntless will achieve in the 2026 Calendar Year. Pursuant to the settlement agreement, Dauntless also agreed to retain at least four sales executives throughout the term of the franchise agreement, including any successor term. On August 1, 2023, the arbitration and federal court case were both dismissed with prejudice.
Source: Item 3 — LITIGATION (FDD page 14)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, a lawsuit was filed by Dauntless Enterprises, Inc. and Kenneth Ayers against City Wide on June 16, 2023. The parties reached a settlement to resolve all claims on July 7, 2023. The definitive settlement agreement between Dauntless, Ayers, and City Wide was dated July 28, 2023.
Under the terms of this settlement, the initial term of the franchise agreement was extended through December 31, 2026. Dauntless also gained the option to secure a successor term from January 1, 2027, through April 3, 2033, contingent upon meeting specific renewal conditions based on gross sales achieved in the 2026 calendar year.
Furthermore, the settlement agreement stipulated that Dauntless must maintain a minimum of four sales executives throughout the duration of the franchise agreement, including any potential successor term. As a result of the settlement, both the arbitration and the federal court case were dismissed with prejudice on August 1, 2023.