Can City Wide freely assign or transfer the Franchise Agreement?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
- 13.1 Transfer by CITY WIDE. This Agreement and all rights and duties hereunder may be freely assigned or transferred by CITY WIDE and will be binding upon and inure to the benefit of CITY WIDE'S successors and assigns.
- 13.2 Transfer by Franchisee. Franchisee understands and acknowledges that the rights and duties set forth in this Agreement are personal to Franchisee and that CITY WIDE has granted the Franchise in reliance on Franchisee's business skill and financial capacity. It is important to CITY WIDE that Franchisee at all times be known to CITY WIDE and meet CITY WIDE's then-current standards and requirements. Accordingly, except pursuant to the specific terms set forth in this Agreement, neither Franchisee, nor any corporation or other entity, domestic or foreign, which has the voting power and control to elect directly or indirectly through another corporation or entity or series of other corporations or entities a majority of the board of directors of Franchisee ("Affiliated Company"), nor any person possessing an interest or holding shares of stock of any kind or nature in Franchisee or any Affiliated Company ("Owner") will be permitted, without the prior written consent of CITY WIDE, to give away, sell, assign, pledge, lease, sublease, devise, or otherwise transfer, either directly or by operation of law or in any other manner, all or any portion of this Agreement; any of Franchisee's rights or obligations under this Agreement, the Franchised Business; or any shares of stock, partnership interest, or interest of any kind or nature in Franchisee or any Affiliated Company (any such transaction being referred to hereinafter as a "Transfer"). In order to secure compliance by Franchisee with the transfer restrictions contained in this Section, all share or stock certificates of any corporate Franchisee and any Affiliated Company will at all times contain a legend sufficient under applicable law to constitute notice of the restrictions on such stock contained in this
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 freely assign or transfer the Franchise Agreement. Specifically, the agreement and all associated rights and duties can be assigned or transferred by City Wide. This transfer is binding upon and benefits City Wide's successors and assigns.
This means that a prospective City Wide franchisee should be aware that the company can transfer the agreement to another entity at any time. This could result in the franchisee working with a different management team or company structure than initially anticipated. While City Wide can freely transfer the agreement, franchisees face restrictions on their ability to transfer the agreement.
Specifically, franchisees must obtain prior written consent from City Wide before any transfer of the agreement, rights, or obligations can occur. This consent is at City Wide's discretion. This difference in transfer rights highlights that City Wide retains significant control over who operates a franchise and can make changes to the franchise agreement through assignment to another party, whereas the franchisee does not have the same flexibility.