What is the 'Effective Date' for the City Wide Business Development Center Agreement?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | (City Wide and Franchisee, collectively "Parties" or individually "Party"). | | RECITALS | | A. | | City | | Wide | | and | | Franchisee | | are | | parties | | to | | that | | certain | | Franchise | | Agreement | | dated | | ("Franchise | | Agreement"),[as amended] | | pursuant | | to | | which | | Franchisee | | is | | granted | | the | | right | | to | | operate | | a | | City | | Wide franchise in the Designated Territory, as defined in the Franchise Agreement ("Franchised Business"). | | B. | | Franchisee desires to enlist the Services (defined below) of City Wide's Business Development | | Center for the purpose of | | assisting in | | the | | prospecting and developing of local City | | Wide clientele. Services will be | | provided starting as of the date the Franchised Business opens for business ("Open Date" or as otherwise agreed | | to by the Parties) hereinafter the "Effective Date". | | C.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to the 2025 City Wide Franchise Disclosure Document, the 'Effective Date' for the Business Development Center Agreement depends on whether the franchisee is new or existing. For new City Wide franchisees, the agreement's term begins on the 'Effective Date,' which coincides with the start of the twelve-month 'New Franchisee Initial Term.' For existing City Wide franchisees engaging the Business Development Center (BDC) Services, the term starts on the date the services begin, also referred to as the 'Effective Date,' and lasts for six months, known as the 'Existing Franchisee Initial Term.'
In both scenarios, the 'Effective Date' marks the commencement of the agreement, but the duration of the initial term differs significantly. New franchisees commit to a 12-month term, while existing franchisees have a shorter, six-month initial term. This distinction likely reflects the different needs and goals of new versus established franchisees utilizing the BDC Services. The agreement automatically renews for successive six-month terms unless terminated according to the terms in Section 3 of the agreement.
Prospective City Wide franchisees should note that the Business Development Center Agreement is separate from the Franchise Agreement. The Business Development Center focuses on prospecting and developing local clientele for the City Wide franchise. Understanding the 'Effective Date' and the term length is crucial for budgeting and planning the use of these services. Franchisees should also review Section 3 of the agreement to understand the conditions and procedures for terminating the agreement.