In the City Wide franchise agreement signature section, what ownership information must be provided?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
As used in this Agreement, the terms "Franchisee" and "Franchisee's" will include all persons who succeed to the interest of the original Franchisee by transfer or operation of law. If Franchisee is a legal entity, then at least one natural person will have at least a majority ownership interest in Franchisee. By their signatures to this Agreement, all partners, shareholders, officers, and directors of the entity that sign this Agreement as Franchisee acknowledge and accept the duties and obligations imposed upon each of them, individually, by the terms of this Agreement. The singular usage includes the plural, and the masculine usage includes the feminine. All partners, shareholders, officers, and directors of the entity executing the Franchise Agreement are required to execute the Guaranty and Assumption of Obligations which is attached to this Franchise Agreement as Attachment A-1. Additionally, spouses or domestic partners of principals, owners or stockholders will be required to provide a conditional guaranty of payment in the form attached to this Agreement as Attachment A-2.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, if the franchisee is a legal entity, at least one natural person must have a majority ownership interest in the franchisee entity. Furthermore, all partners, shareholders, officers, and directors of the entity signing the Franchise Agreement must acknowledge and accept their individual duties and obligations under the agreement by their signatures.
This means that if you are setting up a corporation, LLC, or partnership to operate your City Wide franchise, you as an individual must retain majority ownership. This ensures that there is a responsible individual ultimately in control of the franchise. Additionally, all individuals involved in the ownership or management of the franchisee entity are bound by the terms of the agreement, holding them accountable for the franchise's performance and compliance.
In addition to the above requirements, all partners, shareholders, officers, and directors of the entity executing the Franchise Agreement are required to execute a Guaranty and Assumption of Obligations, which is attached to the Franchise Agreement as Attachment A-1. Spouses or domestic partners of principals, owners, or stockholders will also be required to provide a conditional guaranty of payment in the form attached to the Agreement as Attachment A-2. This ensures that City Wide has additional recourse in case of default or non-compliance, and it also aligns the interests of the franchisee's key stakeholders with the success of the franchise.