Is a City Wide franchisee required to pay a transfer fee to City Wide upon approval of a transfer?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
s eligible for a Royalty Rebate, based upon the criteria set forth in the Royalty Rebate Program, Franchisee and the transferee shall split the Royalty Rebate on a pro rata basis based upon the number of months each owned the Franchise Business. For purposes of calculating the Gross Sales, the aggregate of the Gross Sales of Franchisee before the Transfer will be added to the Gross Sales generated by the transferee after the Transfer. If eligible, the Royalty Rebate will be paid as stated herein and in the Operating Manual.
- 13.5 Transfer Fee. In the event CITY WIDE approves a Transfer, Franchisee shall pay to CITY WIDE a transfer fee ("Transfer Fee") which is equal to Twenty Five Thousand Dollars ($25,000) and any applicable third-party broker fee. Such Transfer Fee will be in addition to any Initial Franchise Fee due and owing under the then-current form of franchise agreement.
- 13.6 Transfer by Franchisee to or among Owners. If the proposed Transfer is to or among Owners or to or among the spouse or domestic partner or children of an Owner and will not result in a loss of Control as set forth in Section 13.3 above, then the terms and conditions of Sections 13.4 and 13.5 will not apply to such Transfer.
- 13.7 Death or Disability. Notwithstanding any other provision in this Section 13, if a surviving spouse, heir, or estate of any deceased or permanently incapacitated or incompetent person who was Franchisee or who owned stock or other interest in Franchisee or an Affiliated Company ("Survivor"), desires to acquire or retain the interest of that person and, if applicable, to continue to operate the Franchised Business pursuant to the System, upon approval by CITY WIDE after a face-to-face interview to determine Survivor's suitability to acquire or retain such interest or to operate the business, Survivor may do so under the terms of this Agreement subject only to the execution and delivery to CITY WIDE of a written agreement that such parties will be bound by the terms of this Agreement, and of any guaranty of this Agreement that may be required by CITY WIDE, and the satisfactory completion by persons designated by CITY WIDE of the initial training provided by CITY WIDE pursuant to this Agreement. Survivor will have up to sixty (60) days to elect to acquire or retain such interest (subject to CITY WIDE's approval).
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, a franchisee is required to pay a transfer fee to City Wide upon approval of a transfer. The standard transfer fee is $25,000, in addition to any applicable third-party broker fees and any Initial Franchise Fee due under the current franchise agreement.
However, this transfer fee is not applicable if the transfer is to or among current owners, or to or among the spouse, domestic partner, or children of an owner, provided that the transfer does not result in a loss of control as defined in the FDD. This provides some flexibility for internal restructuring or family succession without incurring the transfer fee.
Prior to the transfer, the franchisee must also pay all outstanding amounts owed to City Wide and resolve any breaches of the Franchise Agreement or any other agreements with City Wide. Additionally, the franchisee must provide a general release of all claims against City Wide. The prospective transferee must also complete the initial training to City Wide's satisfaction and pay any associated training fees.
City Wide also has the right to inspect the location and the franchisee's books and records, and may require repairs, maintenance, or upgrades to the location before approving the transfer. Additional fees may also be required if discovered during the inspection. These conditions ensure that the franchise maintains City Wide's standards and that the new franchisee is adequately trained.