Are City Wide franchisees allowed to sub-franchise the right to sell services?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
SECTION 1. Grant of Franchise
- 1.1 Subject to all the terms and conditions contained in this Agreement, CITY WIDE grants Franchisee the exclusive right and license to operate a Franchised Business using the System, Software (as defined in Section 11), and Marks solely in the territory ("Designated Territory") as outlined in Attachment B, which is attached to and made a part of this Agreement by reference. Franchisee accepts such right and license, subject to such terms and conditions, and agrees to operate the Franchised Business and to use the System, Software and Marks solely in connection with the Franchised Business.
- 1.2 So long as this Agreement is in force and effect and Franchisee is not in material default under any of its terms, Franchisee will have the exclusive right to operate a Franchised Business in the Designated Territory. Other than in the Designated Territory described in Attachment B, CITY WIDE may itself operate or license to others the right to operate Franchised Businesses utilizing the System and the Marks.
Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD page 44)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the FDD does not explicitly state that City Wide franchisees have the right to sub-franchise. The agreement grants franchisees the exclusive right to operate a franchised business within their designated territory, but it does not mention the ability to sub-franchise or grant others the right to operate a City Wide franchise.
The FDD outlines City Wide's rights to operate or license others to operate franchised businesses utilizing the system and marks outside the franchisee's designated territory. It also states that City Wide may acquire businesses providing similar services and franchise them under different trademarks or service marks, or license others to operate those acquired businesses, regardless of their location. These clauses emphasize City Wide's control over franchising and licensing rights.
Without explicit permission to sub-franchise, a City Wide franchisee is likely prohibited from doing so. Sub-franchising typically requires specific authorization from the franchisor, which is absent in the provided excerpts. A prospective franchisee should seek clarification from City Wide regarding sub-franchising rights and whether there are any circumstances under which a franchisee could grant others the right to operate a City Wide franchise.