Is a City Wide franchisee allowed to engage in activities reasonably anticipated to result in litigation with suppliers?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.22 Best Interest of the System.
Franchisee will not engage in any activity, conduct or practice that is contrary to the best interest of CITY WIDE or Franchisee or that is reasonably anticipated to result in litigation with Franchisee's suppliers or customers, or in public criticism of CITY WIDE or the Franchised Business generally.
- 7.23 Notice of Legal Action.
Franchisee will notify CITY WIDE in writing within five (5) business days of receipt of service or notice of the commencement of any action, suit, or proceeding, and of the issuance of any order, writ, injunction, award, or decree of any court, agency, or other governmental instrumentality, including action against professional services/credentials of any employee or contractor associated with Franchisee, which may adversely affect the operation or financial condition of the Franchised Business.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, a franchisee is not allowed to engage in activities that are reasonably anticipated to result in litigation with the franchisee's suppliers.
This restriction is in place to protect the best interests of the City Wide franchise system. By avoiding activities that could lead to legal disputes with suppliers, franchisees help maintain stable and positive relationships with those suppliers. These relationships are crucial for ensuring a consistent supply of products and services necessary for the operation of all City Wide franchises.
Furthermore, franchisees must notify City Wide in writing within five business days of receiving notice of any legal action that may adversely affect the operation or financial condition of the franchised business. This notification requirement ensures that City Wide is aware of any potential legal issues that could impact the franchise system and allows them to provide support or take necessary actions to protect the brand and other franchisees.