Does the City Wide franchise agreement specify a maximum amount that City Wide can spend on repairs?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
ranchisee will maintain the condition and appearance of the Office of the Franchised Business consistent with CITY WIDE standards, as set forth in the Operating Manual and otherwise in writing. Franchisee will maintain such premises as CITY WIDE may from time to time require to maintain or improve the appearance and efficient operation of the Franchised Business, including, but not limited to, replacement of worn out or obsolete fixtures and signs, and repair of the Location. If any time in CITY WIDE's judgment the general state of repair or the appearance of the premises of the Franchised Business or its equipment, fixtures, or signs does not meet CITY WIDE's standards, CITY WIDE will so notify Franchisee and specify the action Franchisee must take to correct such deficiency. If Franchisee fails or refuses to initiate within thirty (30) calendar days after receipt of such notice, and continues to fail to implement a bona fide program to complete any required maintenance, CITY WIDE will have the right, in addition to all other remedies, to enter upon the premises of the Franchised Business and effect such repairs, painting, maintenance or replacements of equipment, fixtures or signs on Franchisee's behalf and Franchisee will repay CITY WIDE the entire costs on demand. If Franchisee fails to make any such payments or remedy operational deficiencies, such failure will constitute a material breach of this Agreement and CITY WIDE may terminate this Agreement. Except for
those repairs that would constitute a public health or safety hazard, or are required by any governmental agency, any such remodeling requirement will be imposed only in a nondiscriminatory manner upon (i) all comparably situated CIT
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to the 2025 City Wide Franchise Disclosure Document, the franchise agreement outlines specific conditions related to repairs and capital expenditures. City Wide can notify a franchisee of required actions to correct deficiencies in the state of repair or appearance of the franchised business's premises, equipment, fixtures, or signs. If the franchisee fails to initiate and implement a program to complete the required maintenance within 30 days, City Wide has the right to enter the premises and effect such repairs, painting, maintenance, or replacements on the franchisee's behalf, with the franchisee required to repay the entire costs on demand. Failure to make these payments or remedy operational deficiencies constitutes a material breach of the agreement and may lead to termination.
However, there are limitations on City Wide's ability to impose remodeling requirements. Except for repairs related to public health or safety hazards or those required by a governmental agency, any remodeling requirement must be imposed nondiscriminatorily upon all comparably situated City Wide franchisees and City Wide-owned businesses. Furthermore, any capital expenditure exceeding $25,000 will only be required if sufficient time remains in the initial or any successor terms to fully amortize or depreciate such expenditure under the Internal Revenue Code.
In summary, while City Wide can enforce repairs and maintenance to meet its standards, a maximum expenditure of $25,000 is specified for remodeling requirements, subject to amortization conditions. This provides a degree of financial protection for franchisees regarding large, unexpected capital expenditures, ensuring they have sufficient time to recoup the investment during their franchise term. Franchisees should be aware of these conditions and obligations to maintain the standards of the City Wide brand and avoid potential breaches of the franchise agreement.