What happens if a City Wide franchisee understates payments to City Wide?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
ndar month or a portion for the first month of operation and ends at midnight on the last day of each calendar month. Franchisee agrees to comply with any other schedule or method of making payments or reports that CITY WIDE may require from time to time in the Operating Manual. Franchisee's obligation to pay any fees that are earned, accrue, or become due during the Term of this Agreement will survive the Term of this Agreement.
- 3.11 Late Payments. If any report is not made or any fee or any other amount due under this Agreement is not delivered or paid to CITY WIDE on or before the date due, Franchisee must pay the greater of Thirty Dollars ($30) plus interest at the highest rate of interest then permitted by applicable law of the state where the Franchised Business is located for each day such amount is past due. Such nonpayment or non-delivery will be considered a material breach of this Agreement. Any resulting termination, interest due and service charges will be in addition to any other remedies CITY WIDE may have because of such default. If Franchisee is late in making any two payments of any Royalty Fee or Marketing Fee or any other fees due under this Agreement, CITY WIDE may, at its option, require Franchisee to make all subsequent payments of Royalty Fees and Marketing Fees and any other fees using a direct deposit, bank draft, automatic electronic transfer or wire transfer or other similar means of payment. Based on this Agreement and any other documentation that CITY WIDE may, at its sole and absolute right, require Franchisee to sign in advance, CITY WIDE will be authorized without any further grant of authority from Franchisee, to send a bank wire deducting the amount of such fees from Franchisee's bank account and deposit such Fees in CITY WIDE's bank account. In the case of such bank transfers, CITY WIDE is entitled to recover from Franchisee CITY WIDE's costs in sending the bank draft, wire, or electronic transfer fee. If the bank draft, wire or electronic transfer is returned for insufficient funds, CITY WIDE may charge Franchisee a service charge of ten percent (10%) of the bank draft or wire in addition to any transfer fees and costs incurred.
- 3.12 Verification. CITY WIDE has the right to establish reasonable procedures for verifying figures and collecting Royalty Fees, Marketing Fees, and all other recurring fees.
- 3.13 Order for Application of Fees. CITY WIDE will apply for Franchisee's payments under this Section 3 to Franchisee's obligations to CITY WIDE in such order as CITY WIDE may designate from time to time. Franchisee agrees that Franchisee may not designate an order for application of any fees different from that which CITY WIDE designates.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to the 2025 City Wide Franchise Disclosure Document, understating payments or failing to make payments when due constitutes a material breach of the franchise agreement. If any report is not made or any fee or any other amount due under this Agreement is not delivered or paid to CITY WIDE on or before the date due, Franchisee must pay the greater of Thirty Dollars ($30) plus interest at the highest rate of interest then permitted by applicable law of the state where the Franchised Business is located for each day such amount is past due. Such nonpayment or non-delivery will be considered a material breach of this Agreement. Any resulting termination, interest due and service charges will be in addition to any other remedies CITY WIDE may have because of such default.
City Wide has the right to establish reasonable procedures for verifying figures and collecting Royalty Fees, Marketing Fees, and all other recurring fees. If a franchisee is late in making any two payments of any Royalty Fee or Marketing Fee or any other fees due under this Agreement, City Wide may require the franchisee to make all subsequent payments of Royalty Fees and Marketing Fees and any other fees using a direct deposit, bank draft, automatic electronic transfer or wire transfer or other similar means of payment. City Wide is entitled to recover from Franchisee CITY WIDE's costs in sending the bank draft, wire, or electronic transfer fee. If the bank draft, wire or electronic transfer is returned for insufficient funds, CITY WIDE may charge Franchisee a service charge of ten percent (10%) of the bank draft or wire in addition to any transfer fees and costs incurred.
In addition to City Wide's right to terminate the Agreement, if a 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 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.