What happens if a City Wide franchisee cannot provide adequate proof of financing?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
except as provided below:
- 3.4.1 If CITY WIDE, at its sole and absolute right, after evaluating Franchisee's personal abilities, aptitudes, and financial qualifications to be a franchisee, elects within fifteen (15) days
following the submission of all data to terminate this Agreement, Franchisee shall receive a refund of the Initial Fees, less an evaluation fee which will not exceed Two Thousand Five Hundred Dollars ($2,500).
- 3.4.2 If Franchisee is unable to provide adequate proof of financing or have sufficient assets and in an acceptable form, at CITY WIDE's sole and absolute right, within thirty (30) days of the execution of this Agreement, then upon written notice by either part
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, if a franchisee is unable to provide adequate proof of financing or sufficient assets in an acceptable form within 30 days of signing the Franchise Agreement, City Wide has the right to terminate the agreement. This determination is at City Wide's sole discretion.
If City Wide or the franchisee chooses to terminate the agreement due to lack of financing, City Wide will refund the initial fees paid by the franchisee. However, City Wide will deduct $2,500 to cover expenses incurred on the franchisee's behalf. Both City Wide and the franchisee agree that this amount is reasonable, as it would be difficult to determine the exact amount of damages.
This clause protects City Wide from investing time and resources into a franchisee who may not be financially viable. It also provides a limited refund to the franchisee, acknowledging that City Wide has incurred expenses during the initial stages of the franchise process. Prospective franchisees should ensure they have secured adequate financing or have sufficient liquid assets before signing the Franchise Agreement to avoid potential termination and the $2,500 deduction.