In determining the distribution of the benefits of the fund, what interest will City Wide balance with each Franchised Business's proportionate contribution to the City Wide fund?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee understands and acknowledges that the Fund is intended to maximize general public recognition and acceptance of the Marks and develop national business relationships for the benefit of the System as a whole and that CITY WIDE and its designee undertake no obligation in administering the Fund to insure that any particular franchisee benefits directly or pro rata from the Marketing; provided, however, in determining the distribution of the benefits of the Fund, CITY WIDE will use its best efforts to balance its interest in promoting the System with each Franchised Business's proportionate contribution to the Fund, whether CITY WIDE- or franchisee-owned.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, when determining how to distribute the benefits of the marketing fund, City Wide will balance its interest in promoting the overall City Wide system with each franchisee's proportionate contribution to the fund. This means that while City Wide aims to maximize recognition of the brand as a whole, it will also consider how much each individual franchise has contributed to the marketing fund when deciding how to allocate the fund's resources.
This clause intends to ensure that franchisees who contribute more to the marketing fund have a reasonable expectation of receiving a fair share of the benefits, although there is no guarantee of direct or pro rata benefits. City Wide retains the discretion to direct marketing efforts where it believes they will be most effective for the system's overall benefit.
For a prospective franchisee, this implies that while contributing to the marketing fund is mandatory, the direct benefits received may vary. Franchisees should understand that the fund is designed to benefit the entire City Wide system, and individual returns are not guaranteed to be directly proportional to their contributions. It would be prudent for a potential franchisee to discuss with existing franchisees how the marketing fund has been utilized in their specific regions and what kind of benefits they have experienced.