For an existing City Wide franchise, when does the initial term of the accounting services agreement begin?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
Initial Term. The Term of this Agreement shall be one of the following three options:
a. New. Thirty (30) days prior to the Franchised Business opens for business to the general public;
b. Existing. Thirty (30) days after receipt of three (3) complete billing cycles, if the Franchised Business is already open prior to the Effective Date; or
c. Interim. As agreed to and described in the attached Exhibit B Scope of Work,
All the above Terms will continue for a period of twelve (12) months, unless otherwise agreed to in writing among the Parties, or terminated sooner in accordance with Section 3 of this Agreement ("Initial Term"). This Agreement will renew automatically for a period of six (6) months (collectively, each six month term, "Successor Term"), unless terminated in accordance with Section 3 of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, the initial term for an existing City Wide franchise's accounting services agreement begins thirty days after City Wide receives three complete billing cycles, assuming the franchised business was already open before the agreement's effective date. This initial term lasts for twelve months, unless both parties agree otherwise in writing or the agreement is terminated earlier according to its terms.
This clause is important for existing franchisees because it clarifies when they are obligated to begin using and paying for City Wide's accounting services. The requirement of three complete billing cycles ensures that City Wide has sufficient financial data to provide accurate and effective accounting services.
After the initial twelve-month term, the agreement automatically renews for successive six-month terms, referred to as "Successor Terms," unless terminated as per the agreement's conditions. This automatic renewal provides continuity but also requires the franchisee to actively manage the agreement to avoid unwanted extensions. Either party can terminate the agreement after the initial term by providing ninety days written notice, offering flexibility for both the franchisee and City Wide to adjust their arrangements as needed.