Does City Wide have a duty to take control over matters reserved to the franchisee?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.32 CITY WIDE's Right to Manage.
Franchisee hereby grants to CITY WIDE the right to take such steps as are necessary to manage the Franchised Business for the account of Franchisee in the event of Franchisee's death or in the event that an independent third party (such as a medical doctor) reasonably determines that Franchisee is incapacitated or incapable of running the Franchised Business, and to receive a reasonable fee for such services.
- 14.8 Right to Enter and Operate.
In addition to CITY WIDE's right to terminate this Agreement, and not in lieu of such right or any other rights against Franchisee, if Franchisee has not cured a default under this Agreement within the time allotted by CITY WIDE after receipt of the Notice to Cure from CITY WIDE, CITY WIDE may, at its option, enter the premises of the Franchised Business and exercise complete authority with respect to its operation until such time as CITY WIDE determines that Franchisee's default has been cured and that there is compliance with the requirements of this Agreement.
Franchisee specifically agrees that a Representative (as defined in Section 16) of CITY WIDE may take over, control, and operate the business, and that Franchisee will pay CITY WIDE a service fee of not less than Three Hundred Dollars ($300) per day plus all travel expenses, room and board and other expenses reasonably incurred by such Representative so long as it will be required by the Representative to enforce compliance.
Franchisee further agrees that if, as herein provided, CITY WIDE temporarily operates for Franchisee the business franchised herein, Franchisee will indemnify and hold harmless CITY WIDE and any Representative of CITY WIDE who may act hereunder, respecting any and all acts and omissions which CITY WIDE may perform, or fail to perform as regards the interests of Franchisee or third parties.
If a Cyber Event occurs, City Wide reserves the right, but shall not have any obligation, to perform and/or control and/or cause its third-party consultants to perform and/or control all aspects of the response to the Cyber Event including, without limitation, the investigation, containment and resolution of the Cyber Event and all communications.
City Wide's control of the response to a Cyber Event shall not create any liability for City Wide or additional rights for Franchisee, entitle Franchisee to damages or relieve Franchisee of Franchisee's indemnification obligations under Section 7.
Franchisee shall reimburse City Wide for all of City Wide's out-of-pocket costs and expenses incurred in responding to and remedying any Cyber Event if such Cyber Event is conclusively determined to have been caused solely by Franchisee or directly related to Franchisee's Franchised Business operations.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, City Wide does not have a duty to take control over matters reserved to the franchisee, but it does reserve the right to manage the franchised business under specific circumstances.
Specifically, City Wide has the right to manage the Franchised Business for the account of the franchisee in the event of the franchisee's death or if an independent third party (such as a medical doctor) reasonably determines that the franchisee is incapacitated or incapable of running the Franchised Business. City Wide is also entitled to receive a reasonable fee for these services.
Additionally, if a franchisee fails to cure a default under the Franchise Agreement, City Wide has the option to enter the premises and exercise complete authority over the business's operation until the default is cured. In such cases, the franchisee will pay City Wide a service fee of not less than $300 per day, plus all travel expenses, room and board, and other expenses reasonably incurred by City Wide's representative. The franchisee also agrees to indemnify and hold harmless City Wide for any acts or omissions during this period of temporary operation.
Furthermore, in the event of a cyber event, City Wide reserves the right, but does not have the obligation, to perform or control all aspects of the response, including investigation, containment, resolution, and communications. However, City Wide's control of the response to a cyber event does not create any liability for City Wide or additional rights for the franchisee, entitle the franchisee to damages, or relieve the franchisee of their indemnification obligations. If the cyber event is caused solely by the franchisee or directly related to their franchised business operations, the franchisee will reimburse City Wide for all out-of-pocket costs and expenses incurred in responding to and remedying the event.