What is Dauntless Enterprises, Inc.'s obligation regarding sales executives as part of the settlement agreement with City Wide?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 3 — LITIGATION (FDD page 14)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, Dauntless Enterprises, Inc. is required to maintain a specific number of sales executives as part of their settlement agreement with City Wide. The settlement, dated July 28, 2023, stipulates that Dauntless must retain at least four sales executives throughout the term of their franchise agreement, including any successor term. This requirement was part of a resolution to a legal dispute between Dauntless and City Wide, which involved disagreements over the renewal of Dauntless' franchise agreement.
This obligation has significant implications for Dauntless as a franchisee. Maintaining a team of at least four sales executives represents a fixed operational cost that Dauntless must factor into its business planning and financial projections. Failure to meet this staffing requirement could potentially lead to a breach of the settlement agreement and the franchise agreement, resulting in penalties or other enforcement actions by City Wide.
For prospective City Wide franchisees, this situation highlights the importance of understanding all obligations outlined in settlement agreements and franchise agreements. It also underscores the potential impact of staffing requirements on the financial health and operational flexibility of a franchise. While this specific obligation applies to Dauntless, other franchisees may have similar requirements related to staffing or other operational matters, as City Wide notes that franchisees must comply with minimum staffing requirements as set forth in the Operating Manual.