What happens if a receiver is appointed for the City Wide franchised business?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
In order to prevent any interruption of the operation of the Franchised Business which would cause harm to that business and thereby depreciate the value of the Franchised Business, in the event that Franchisee is dead or absent or incapacitated as defined in this Agreement and is not, therefore, in the sole judgment of CITY WIDE, able to operate the Franchised Business, then CITY WIDE is authorized to operate the Franchised Business for so long as CITY WIDE
deems necessary and practical, and without waiver of any other rights or remedies CITY WIDE may have under this Agreement; provided, however, that CITY WIDE will not be obligated to operate the Franchised Business. All monies from the operation of the Franchised Business during such period of operation by CITY WIDE will be kept in a separate account and the expenses of the Franchised Business, including reasonable compensation and expenses for CITY WIDE's representative, will be charged to that separate account. If CITY WIDE temporarily operates the Franchised Business for Franchisee, Franchisee will indemnify and hold harmless CITY WIDE and any representative of CITY WIDE who may act hereunder, from all claims arising from the acts and omissions of CITY WIDE and its representative.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
Based on the 2025 City Wide Franchise Disclosure Document, there is no information provided regarding the appointment of a receiver for the franchised business. The document does outline City Wide's right to manage the business in the event of the franchisee's death or incapacitation, but it does not specifically address receivership.
However, the FDD does state that City Wide can operate the Franchised Business temporarily if the franchisee is dead, absent, or incapacitated and unable to operate the business, according to City Wide's judgment. City Wide is authorized to operate the franchise for as long as it deems necessary and practical to prevent interruption of the business. All monies from the operation of the franchised business during such period of operation by City Wide will be kept in a separate account, and the expenses of the franchised business, including reasonable compensation and expenses for City Wide's representative, will be charged to that separate account.
To fully understand the implications of a receivership, a prospective City Wide franchisee should seek clarification from the franchisor regarding the procedures and consequences should a receiver be appointed to manage the franchise. This would include understanding who has the authority to appoint a receiver, what the receiver's responsibilities would be, and how it would affect the franchisee's rights and obligations under the franchise agreement.