Can a City Wide franchisee terminate the franchise agreement, and if so, under what grounds?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
At any time after the Initial Term, either Party may terminate this Agreement upon providing ninety (90) days written notice to the other Party, with the termination effective on the ninetieth day from date of delivery of the written notice, and acceptance by the Parties.
Franchisee hereby acknowledges and accepts that any bonuses and/or commissions earned during the Term of the Agreement are still owed and payable pursuant to Exhibit B.
City Wide will have the right, without incurring any liability to Franchisee, by notice in writing effective when given, to terminate this Agreement in the event the Franchise Agreement is terminated by City Wide.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, a franchisee can terminate the agreement under specific conditions. After the initial term, either City Wide or the franchisee can terminate the agreement by providing 90 days written notice to the other party, with the termination effective on the 90th day from the delivery date of the written notice.
However, City Wide can terminate the agreement with written notice if the Franchise Agreement is terminated by City Wide. This can occur if the franchisee defaults on the agreement and fails to correct the default to City Wide's satisfaction within 30 days after receiving a written "Notice to Cure." Defaults leading to termination include knowingly maintaining false records, failing to satisfactorily complete training, committing two or more defaults within a 12-month period (with an exception for revenue per capita growth defaults), failing to operate the business as specified, being party to another terminated City Wide franchise agreement, or failing to operate the business for seven or more days without City Wide's consent, leading to the business being declared abandoned.
If the franchisee breaches any term in any agreement material to the franchised business or any other agreement with City Wide or its affiliates, and the default is not cured within the specified time, it is considered a default under the Franchise Agreement, potentially leading to termination. Upon termination, the franchisee must cease operating as a City Wide franchisee, stop using the System or Marks, pay all sums owed to City Wide (including lost royalties and fees), destroy all copies of the Operating Manual and Confidential Information, change phone numbers listed under City Wide's Marks, and provide City Wide with lists of employees, subcontractors, suppliers, and customers.