What form of franchise agreement must a City Wide franchisee execute to renew the franchise?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
2.2.9 Franchisee must execute the form of franchise agreement being used by CITY WIDE at the time Franchisee renews, including the Successor Addendum (See Attachment J) (collectively, "Successor Franchise Agreement"), which Successor Franchise Agreement will in all respects supersede this Agreement and the terms of which may differ from the terms of this Agreement, including, without limitation, a higher percentage Royalty Fee (See Section 3.7.1) and Marketing Fee (See Section 3.7.2(a).
2.2.10 Franchisee must pay CITY WIDE a renewal fee ("Successor Fee") equal to fifty percent (50%) of the then-current Initial Franchise Fee set forth in the Franchise Disclosure Document , at the time Franchisee executes the Successor Franchise Agreement which amount will be instead of payment of a new Initial Franchise Fee.
2.2.11 Franchisees must comply with CITY WIDE's then-current criteria for operating a Franchised Business, including CITY WIDE's then-current franchisee qualification and training requirements.
2.2.12 Franchisee must execute a general release, in a form CITY WIDE prescribes, releasing any claims against CITY WIDE or its subsidiaries, affiliates, officers, directors, agents, and employees which Franchisee may have or assert at time of renewal; and
2.2.13 Franchisee must present evidence satisfactory to CITY WIDE that Franchisee has the right to remain in possession of the Location of the Office (See Item 12) for the Term, or a mutually acceptable alternative Location.
If Franchisee elects not to enter into a Successor Franchise Agreement for any reason or fails to sign the Successor Franchise Agreement before the expiration of the Term, then Franchisee must sell Franchisee's rights to the Designated Territory to CITY WIDE, or a third party buyer approved by CITY WIDE, in accordance with the requirements outlined in the Operating Manual, and such sale must close before the expiration of the Term. For the avoidance of any confusion, Franchisee acknowledges and agrees that CITY WIDE always maintains its right of first refusal relating to the sale by Franchisee of any rights relating to the Designated Territory, and such right of first refusal does not in any way require CITY WIDE to purchase from Franchisee such rights relating to the Designated Territory.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, a franchisee must execute the current form of franchise agreement, including the Successor Addendum, at the time of renewal. This is collectively known as the "Successor Franchise Agreement." This new agreement will completely replace the original agreement. The terms of the Successor Franchise Agreement may differ from the original, potentially including higher Royalty Fees and Marketing Fees.
To renew the franchise agreement with City Wide, the franchisee must meet several conditions. These include not being in default of any agreements with City Wide, operating the franchised business in full compliance with City Wide's standards and the operating manual, and fulfilling all monetary obligations to City Wide. Additionally, franchisees must comply with City Wide's current criteria for operating a franchised business, including qualification and training requirements.
Furthermore, the franchisee must pay City Wide a renewal fee, termed the "Successor Fee," which is equal to 50% of the then-current Initial Franchise Fee. The franchisee must also execute a general release, absolving City Wide from any claims against them. Finally, the franchisee must provide evidence of their right to remain in possession of the office location for the term of the Successor Franchise Agreement or secure a mutually acceptable alternative location.
If a franchisee chooses not to enter into a Successor Franchise Agreement or fails to sign it before the expiration of the current term, they must sell their rights to the designated territory back to City Wide or to a third-party buyer approved by City Wide. This sale must be completed before the term expires, and City Wide retains the right of first refusal for the territory.