How will a City Wide franchisee be notified if City Wide reduces the scope of the non-compete covenants?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee understands and acknowledges that CITY WIDE will have the right, in its sole and absolute discretion, to reduce the scope of any covenant set forth in Paragraphs 3 and 4 in this Non-Compete Agreement, or any portion thereof, without Franchisee's consent, effective immediately upon receipt by Franchisee of written notice thereof, and Franchisee will comply forthwith with any covenant as so modified, which will be fully enforceable notwithstanding any contrary provisions of the Franchise Agreement, if any.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, City Wide has the right to reduce the scope of the non-compete agreement. The franchisee will be notified of this change through written notice. Upon receiving this notice, the reduction in scope is effective immediately, and the franchisee must comply with the modified covenant.
This means that City Wide retains the flexibility to adjust the non-compete terms during the franchise agreement. While this benefits City Wide by allowing them to adapt the non-compete to changing market conditions or legal requirements, it also introduces an element of uncertainty for the franchisee. The franchisee needs to be prepared to adapt to a potentially narrower scope of protection, which could impact their business operations.
It is important for a prospective City Wide franchisee to fully understand the implications of this clause. They should consider how a reduced non-compete scope might affect their ability to protect their business and market share, especially if City Wide modifies the agreement in the future. Franchisees should seek clarification from City Wide regarding the circumstances under which they might reduce the scope of the non-compete agreement and what factors they consider when making such decisions.