What is the definition of 'Designated Territory' in the context of the City Wide franchise agreement?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
- 1.1 Subject to all the terms and conditions contained in this Agreement, CITY WIDE grants Franchisee the exclusive right and license to operate a Franchised Business using the System, Software (as defined in Section 11), and Marks solely in the territory ("Designated Territory") as outlined in Attachment B, which is attached to and made a part of this Agreement by reference. Franchisee accepts such right and license, subject to such terms and conditions, and agrees to operate the Franchised Business and to use the System, Software and Marks solely in connection with the Franchised Business.
- 1.2 So long as this Agreement is in force and effect and Franchisee is not in material default under any of its terms, Franchisee will have the exclusive right to operate a Franchised Business in the Designated Territory. Other than in the Designated Territory described in Attachment B, CITY WIDE may itself operate or license to others the right to operate Franchised Businesses utilizing the System and the Marks.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, the 'Designated Territory' is the specific geographic area outlined in Attachment B of the franchise agreement, within which the franchisee is granted the exclusive right and license to operate a City Wide Franchised Business using the City Wide system, software, and marks. This exclusivity is contingent upon the franchise agreement remaining in effect and the franchisee not being in material default of its terms.
The FDD specifies that outside of this Designated Territory, City Wide retains the right to operate or license others to operate City Wide Franchised Businesses. This highlights the importance of understanding the boundaries and potential of the Designated Territory, as it defines the franchisee's exclusive operating area.
City Wide can reduce the franchisee's Designated Territory size if the franchisee fails to comply with City Wide's minimum staffing requirements as set forth in the Operating Manual. To retain rights to the Designated Territory, the franchisee must meet the Annual Revenue Per Capita Growth, growing the gross revenues generated by the Franchised Business to no less than $0.20 per person per year, measured using a three-year rolling average. The franchisee must also live year-round and full time in the Designated Territory.