What is the effect of a transfer by a City Wide franchisee if City Wide's consent is not obtained?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
Any purported assignment or transfer, by operation of law or otherwise, not having the prior written consent of CITY WIDE will be null and void and will constitute a material breach of this Agreement entitling CITY WIDE, at its sole and absolute right, to immediately terminate this Agreement; provided however, that CITY WIDE will not unreasonably withhold its approval of a Transfer to a proposed transferee who is of good moral character and whose business experience and aptitude, financial resources, and other qualifications meet CITY WIDE's then-current standards, so long as Franchisee is in full compliance with this Agreement at the time of the proposed Transfer.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, any attempt to transfer the franchise without City Wide's prior written consent is considered invalid and a material breach of the franchise agreement. This means that if a franchisee sells, assigns, or otherwise transfers any portion of the franchise without obtaining City Wide's approval, the transfer will not be recognized, and City Wide has the right to immediately terminate the franchise agreement.
However, City Wide states that it will not unreasonably withhold approval of a transfer to a qualified proposed transferee. The proposed transferee must be of good moral character and meet City Wide's current standards for business experience, aptitude, financial resources, and other qualifications. Additionally, the franchisee must be in full compliance with the franchise agreement at the time of the proposed transfer.
This requirement protects City Wide by ensuring that franchise locations are operated by qualified individuals who meet their standards. It also gives City Wide the ability to end the agreement if a transfer occurs without their approval. Franchisees should be aware of these restrictions and follow the proper procedures for seeking approval before attempting any transfer to avoid potential termination of their franchise agreement.