What factors does City Wide consider when evaluating a proposed transferee's qualifications?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
le law to constitute notice of the restrictions on such stock contained in this
Agreement and to allow such restrictions to be enforceable. Such legend will appear in substantially the following form:
| "The sale, transfer, pledge, or hypothecation of this stock is restricted | ||
|---|---|---|
| pursuant to an option, the terms of which are contained in a Franchise | ||
| Agreement dated between CITY WIDE | ||
| FRANCHISE COMPANY, INC., and" |
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.
- 13.3 Transfer by Franchisee Resulting in No Loss of Control.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, when a franchisee seeks to transfer their franchise to another party, City Wide assesses the proposed transferee based on several factors. City Wide will not unreasonably withhold approval of a transfer to someone of good moral character who meets City Wide's standards. These standards include the transferee's business experience and aptitude, financial resources, and other qualifications that meet City Wide's then-current requirements. The proposed transferee must also apply for a Franchised Business under the City Wide system and meet all of City Wide's current standards for becoming a franchisee.
To initiate the transfer process, the franchisee must notify City Wide in writing, providing a complete description of the proposed transfer terms. This description must include the prospective transferee's name, address, financial qualifications, and a detailed account of their business experience over the past five years. This information allows City Wide to evaluate whether the transferee has the necessary skills and resources to successfully operate the franchise.
City Wide also retains the right to purchase the franchisee's interest by matching the monetary purchase price and payment schedule offered to the proposed transferee, although it does not have to match any non-monetary terms. If City Wide declines to exercise this option, it must notify the franchisee in writing of its approval or disapproval of the prospective transferee within thirty days after the option expires. If City Wide approves the proposed transferee, the transfer can proceed once the transferee completes the required initial training and pays all associated fees.
Prior to the final transfer, the franchisee must pay all outstanding amounts owed to City Wide, resolve any breaches of the franchise agreement, and provide a general release of claims against City Wide. The transferee will also need to execute the then-current form of the franchise agreement, pay all required fees, including initial fees, and provide any additional guarantees of their obligations as required by City Wide. City Wide may also require the transferee to guarantee the franchisee's obligations under the existing or any new franchise agreement.