What must a City Wide franchisee do to relocate the Franchised Business after damage or taking by eminent domain?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.2.1 If Franchisee ceases to operate the Franchised Business in the Designated Territory, or otherwise forfeit the right to do or transact business in the jurisdiction where the Franchised Business is located; provided, however, that if any such loss of possession results from the governmental exercise of the power of eminent domain, or if, through no fault of Franchisee, the premises are damaged or destroyed by a disaster such that they cannot, in CITY WIDE's judgment, reasonably be restored, then, in either such event, no default will be deemed to have occurred if, within thirty (30) days after the damage or taking by eminent domain, Franchisee has applied to CITY WIDE for approval to relocate the Franchised Business for the remainder of the Term, which approval will not unreasonably be withheld, but which may be conditioned upon the payment of a service fee and a minimum royalty percentage to CITY WIDE during the period in which the Franchised Business is not in operation; or
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, if the premises of the Franchised Business are damaged or destroyed through no fault of the franchisee, or if possession is lost due to eminent domain, the franchisee will not be considered in default if they apply to City Wide for approval to relocate the Franchised Business within thirty (30) days of the event. This application is for the remainder of the franchise term.
City Wide's approval for relocation will not be unreasonably withheld. However, City Wide may condition its approval on the franchisee paying a service fee and a minimum royalty percentage during the period the business is not operational.
This means that a City Wide franchisee facing such circumstances must act quickly to apply for relocation approval to avoid being in default of their agreement. They should also be prepared to potentially pay additional fees during the downtime, which could impact their financial planning.