Does the Force Majeure clause in the City Wide agreement excuse the payment of monies?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
- 23.4 Force Majeure.
Whenever a period of time is provided in this Agreement for either party to do or perform any act or thing, except the payment of monies, neither party will be liable or responsible for any delays due to strikes, lockouts, casualties, acts of God, pandemics, war, governmental regulation or control or other causes beyond the reasonable control of the parties, and in any event the time period for the performance of an obligation under this Agreement will be extended for the amount of time of the delay.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, the Force Majeure clause does not excuse the payment of monies. The agreement states that while delays or failures in performance due to events like acts of God or strikes are excused, this exception does not apply to the payment of monies.
This means that even if unforeseen circumstances such as natural disasters or widespread work stoppages occur, a City Wide franchisee is still obligated to make all payments due to City Wide. Failure to make these payments could be considered a breach of the agreement, potentially leading to penalties or termination of the franchise agreement.
This is a critical point for prospective franchisees to understand, as it highlights the financial responsibilities that persist regardless of external disruptions. Franchisees should ensure they have sufficient financial reserves or insurance to cover potential disruptions and maintain their payment obligations to City Wide. This clause is not uncommon in franchise agreements, as franchisors typically rely on consistent revenue streams to support their operations and provide services to franchisees.