Does the Guaranty for City Wide franchises require City Wide to perfect any security interest?

According to City Wide's 2025 Franchise Disclosure Document, the Guaranty agreement does not require City Wide to perfect any security interest. Section 3 of the Guaranty outlines that the Guarantors waive any requirement that City Wide protect, secure, perfect, or insure any security interest or lien on property related to the franchise agreement. This waiver extends to any action against the franchisee or any collateral.

This means that the guarantors of the City Wide franchise agreement cannot demand that City Wide take specific actions to secure its interests, such as perfecting a security interest. This could potentially increase the risk for City Wide, as it limits their ability to ensure their financial position is protected in case of franchisee default. However, it also simplifies the process for City Wide, as they are not obligated to take on the administrative and legal burdens of perfecting security interests.

For a prospective franchisee, this clause in the Guaranty means that any individual acting as a guarantor for their franchise is waiving certain rights that could protect City Wide's interests. This could make the guarantor's obligations more stringent, as they cannot insist that City Wide take steps to minimize their potential losses. Franchisees should ensure that any guarantors fully understand the implications of this waiver before signing the Guaranty agreement.