What is the definition of 'Owner' according to the City Wide Franchise Agreement?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
- 13.2 Transfer by Franchisee. Franchisee understands and acknowledges that the rights and duties set forth in this Agreement are personal to Franchisee and that CITY WIDE has granted the Franchise in reliance on Franchisee's business skill and financial capacity. It is important to CITY WIDE that Franchisee at all times be known to CITY WIDE and meet CITY WIDE's then-current standards and requirements. Accordingly, except pursuant to the specific terms set forth in this Agreement, neither Franchisee, nor any corporation or other entity, domestic or foreign, which has the voting power and control to elect directly or indirectly through another corporation or entity or series of other corporations or entities a majority of the board of directors of Franchisee ("Affiliated Company"), nor any person possessing an interest or holding shares of stock of any kind or nature in Franchisee or any Affiliated Company ("Owner") will be permitted, without the prior written consent of CITY WIDE, to give away, sell, assign, pledge, lease, sublease, devise, or otherwise transfer, either directly or by operation of law or in any other manner, all or any portion of this Agreement; any of Franchisee's rights or obligations under this Agreement, the Franchised Business; or any shares of stock, partnership interest, or interest of any kind or nature in Franchisee or any Affiliated Company (any such transaction being referred to hereinafter as a "Transfer"). In order to secure compliance by Franchisee with the transfer restrictions contained in this Section, all share or stock certificates of any corporate Franchisee and any Affiliated Company will at all times contain a legend sufficient under applicable law to constitute notice of the restrictions on such stock contained in this
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, an 'Owner' is defined within the context of transfer restrictions. Specifically, it refers to any person possessing an interest or holding shares of stock of any kind or nature in the Franchisee or any Affiliated Company.
This definition is important because it broadens the scope of individuals who are subject to City Wide's transfer restrictions. It means that not only the direct Franchisee but also anyone holding stock or interest in the Franchisee or an affiliated company is restricted from transferring their interest without prior written consent from City Wide. This gives City Wide significant control over who can be involved in the ownership of a franchise.
For a prospective franchisee, this means that if you plan to bring in partners or investors, or if your franchise is owned by a corporation or other entity, anyone holding shares or an interest in that entity will be subject to City Wide's approval before they can transfer their shares or interest. This could potentially complicate future ownership changes or investment strategies. Franchisees should carefully consider this when structuring their business and ensure they understand the implications for any potential future transfers of ownership or equity.