What happens if a City Wide franchisee operates the Franchised Business inconsistently with the Marks?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
14.2.6 If Franchisee misuses or makes any unauthorized use of the Marks or Software, operates the Franchised Business in a manner contrary to or inconsistent with the Marks, or otherwise materially impairs the goodwill associated with the Marks or CITY WIDE's rights in the Marks or Software; or
5.5 In order to preserve the validity and integrity of the Marks, copyrights, patents (which copyrights and/or patents may be identified by CITY WIDE in writing), Software (as defined in Section 11.10) and Confidential Information (as defined in Section 9.1) licensed under this Agreement and to assure that Franchisee is properly employing the same in the operation of Franchisee's Franchised Business, CITY WIDE or its agents will have the right to enter and inspect Franchisee's Location at all reasonable times and in a reasonable manner and will also have the right to observe the manner in which Franchisee is rendering services and conducting Franchisee's activities and operations and to inspect equipment, merchandise, accessories, products, supplies, reports, forms and documents and related data for test of content and evaluation purposes to make certain that the Franchised Business is being operated in accordance with the quality control provisions and performance standards established by CITY WIDE.
5.6 Franchisee understands and agrees that any use of the Marks other than as expressly authorized by this Agreement, without CITY WIDE's prior written consent, is an infringement of CITY
WIDE's rights and a material breach of this Agreement and that the right to use the Marks granted under this Agreement does not extend beyond the end of the Term of this Agreement. Franchisee expressly covenants that, during the Term of this Agreement and after any termination or expiration, Franchisee will not, directly, or indirectly, commit any act of infringement or contest or aid others in contesting the validity of CITY WIDE's right to use the Marks or take any other action in derogation of CITY WIDE's rights.
- 14.8 Right to Enter and Operate.
In addition to CITY WIDE's right to terminate this Agreement, and not in lieu of such right or any other rights against Franchisee, if Franchisee has not cured a default under this Agreement within the time allotted by CITY WIDE after receipt of the Notice to Cure from CITY WIDE, CITY WIDE may, at its option, enter the premises of the Franchised Business and exercise complete authority with respect to its operation until such time as CITY WIDE determines that Franchisee's default has been cured and that there is compliance with the requirements of this Agreement.
Franchisee specifically agrees that a Representative (as defined in Section 16) of CITY WIDE may take over, control, and operate the business, and that Franchisee will pay CITY WIDE a service fee of not less than Three Hundred Dollars ($300) per day plus all travel expenses, room and board and other expenses reasonably incurred by such Representative so long as it will be required by the Representative to enforce compliance.
14.9 If this Agreement is terminated by the Franchisor due to an uncured breach by Franchisee, Franchisee will forfeit all rights Franchisee may have otherwise had in and to any Royalty Rebate if the Agreement were not terminated.
15.2 At the end of the Term of this Agreement, whether because of an event of default pursuant to Section 14 above or otherwise, Franchisee will immediately do each of the following:
15.2.1 Cease to be a franchisee of CITY WIDE and cease to operate the former Franchised Business or any other business using any part of the System or Marks.
After that Franchisee will not, directly or indirectly, represent to the public that the former Franchised Business is or was operated in any way connected with the System or hold itself out as a present or former franchisee of CITY WIDE.
- 15.2.2 Pay all sums owing to CITY WIDE.
Upon termination of this Agreement for any default by Franchisee, such sums will include lost Royalties Fees, Marketing Fees and other fees for the remainder of the Term, and other damages, costs, and expenses incurred by CITY WIDE as a result of the default.
Franchisee's obligations as a Franchisee include, but are not limited to, the use of only prescribed equipment, layouts, and designs; strict adherence to the use of the proprietary information and Operating Manual; and selling of only designated service and product lines. Franchisee's compliance with the CITY WIDE standards and policies in conjunction with the Marks provides the basis for the valuable goodwill.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, if a franchisee operates the Franchised Business in a manner that is inconsistent with the Marks, it constitutes a breach of the franchise agreement. City Wide emphasizes that franchisees must strictly adhere to the company's standards and policies to ensure uniform operation across all City Wide Franchised Businesses. This includes maintaining standards for quality, service, and operational integrity. The franchisee must use only prescribed equipment, layouts, and designs, and strictly adhere to the proprietary information and Operating Manual, selling only designated service and product lines. Compliance with these standards, in conjunction with the Marks, is the basis for the goodwill associated with the City Wide brand.
City Wide retains the right to inspect the franchisee's location at reasonable times and in a reasonable manner to ensure compliance with quality control provisions and performance standards. This includes observing how services are rendered, activities and operations are conducted, and inspecting equipment, merchandise, reports, forms, and documents. Any use of the Marks not expressly authorized by the agreement, without City Wide's prior written consent, is considered an infringement of City Wide's rights and a material breach of the agreement. The right to use the Marks does not extend beyond the term of the agreement, and the franchisee covenants not to infringe or contest City Wide's rights to use the Marks.
If a franchisee misuses the Marks, operates the business inconsistently with the Marks, or impairs the goodwill associated with the Marks, it can lead to termination of the franchise agreement. In addition to termination, City Wide has the option to enter the premises of the Franchised Business and take control of its operation if the franchisee fails to cure a default after receiving notice. During this period, the franchisee is required to pay City Wide a service fee of not less than $300 per day, plus all travel expenses, room and board, and other expenses incurred by the representative enforcing compliance. The franchisee must also indemnify and hold harmless City Wide for any acts or omissions during this temporary operation.
Upon termination of the agreement due to an uncured breach by the franchisee, the franchisee forfeits all rights to any Royalty Rebate. The franchisee must also cease operating the business using any part of the System or Marks, pay all sums owing to City Wide, including lost Royalties Fees, Marketing Fees, and other damages, and destroy all tangible copies of the Operating Manual, the Software, and all other Confidential Information. Additionally, the franchisee must change all phone numbers listed under any Mark owned by City Wide and provide City Wide with lists of employees, subcontractors, suppliers, and customers.