What happens if a City Wide franchisee is in material breach of the Franchise Agreement?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
You must meet this requirement each year, however, CITY WIDE will measure your Annual Revenue Per Capital Growth by calculating the average revenues generated by Franchisee's Franchised Business in the preceding two (2) years of operations. Each year thereafter, CITY WIDE will measure your Annual Revenue Per Capita Growth by calculating the average revenues generated by your CITY WIDE Franchised Business in the immediately preceding two (2) years of operations. If you fail to satisfy the Annual Revenue Per Capita Growth requirement in any twenty-four month period, it will be deemed a material breach of the Franchise Agreement, and CITY WIDE will then have the right to reduce the size of your Designated Territory, grant additional franchises within the Designated Territory or to terminate your Franchise Agreement, however, you will have a period not to exceed one (1) year to cure such breach.
These Annual Revenue Per Capita Growth figures are not financial performance representations for your CITY WIDE Franchised Business. Other than as provided in ITEM 19, CITY WIDE does not furnish or authorize its salespersons to furnish any oral or written information concerning the actual or potential sales, costs, income or profits of a CITY WIDE Franchised Business. If your Franchise Agreement is renewed, your Annual Revenue Per Capita Growth must increase by the per capita growth as stated in the Manual and in the then-current Franchise Disclosure Document, generated in the immediately preceding two (2) years of operations.
Source: Item 12 — TERRITORY (FDD pages 36–39)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, a franchisee's failure to meet the Annual Revenue Per Capita Growth requirement is considered a material breach of the Franchise Agreement. City Wide calculates this growth by averaging the revenues generated by the franchisee's business over the preceding two years.
If a franchisee fails to meet the Annual Revenue Per Capita Growth requirement, City Wide has the right to take certain actions. These actions include reducing the size of the franchisee's Designated Territory, granting additional franchises within that territory, or even terminating the Franchise Agreement altogether. However, the franchisee is given a period not exceeding one year to correct the breach.
It is important to note that the Annual Revenue Per Capita Growth figures are not financial performance representations for the City Wide franchise. Prospective franchisees should be aware that City Wide does not furnish or authorize its salespersons to provide any oral or written information concerning the actual or potential sales, costs, income, or profits of a City Wide franchise, except as provided in Item 19 of the FDD. If the Franchise Agreement is renewed, the Annual Revenue Per Capita Growth must increase by the per capita growth as stated in the Manual and in the then-current Franchise Disclosure Document, generated in the immediately preceding two years of operations.