What is the 'Initial Term' referring to in the City Wide Business Development Center Agreement?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
a. | NEW. Any new Franchisee signing a new Franchise Agreement for a new Franchised Business is a new Franchisee to City Wide, the term of this Agreement will begin on the "Effective Date" and will continue for a period of twelve (12) months, unless terminated sooner in accordance with Section 3 of this Agreement ("New Franchisee Initial Term"). b. EXISTING. If Franchisee is an existing Franchise of City Wide and wishes to engage City Wide for the BDC Services, the term of this Agreement will begin on date services to begin, the ("Effective Date") and will continue for a period of six (6) months, unless terminated sooner in accordance with Section 3 of this Agreement ("Existing Franchisee Initial Term").
Term may collectively be referred to as "Initial Term". This Agreement will renew automatically for a period of
- For ease of reference herein, the New Franchisee Initial Term and the Existing Franchisee Initial
six (6) months (collectively, each six month term, "Successor Term"), unless terminated in accordance with Section 3 of this Agreement.
Termination.
At any time after the Initial Term, either Party may terminate this Agreement upon providing ninety (90) days written notice to the other Party, with the termination effective on the ninetieth day from date of delivery of the written notice, and acceptance by the Parties.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, the Initial Term in the Business Development Center Agreement refers to the initial length of the agreement between City Wide and the franchisee for business development services. For new City Wide franchisees, the initial term is twelve months, beginning on the Effective Date, which is when the franchised business opens. For existing franchisees engaging City Wide for BDC Services, the initial term is six months, starting from the date services begin, also referred to as the Effective Date.
After the Initial Term, the agreement automatically renews for successive six-month periods, each called a Successor Term, unless either party terminates the agreement. Termination can occur at any time after the Initial Term by providing ninety days' written notice.
Understanding the Initial Term is crucial for franchisees as it dictates the period they are committed to using City Wide's business development services. Franchisees should consider their business needs and growth projections to determine if the initial term aligns with their strategies. Additionally, franchisees should be aware of the conditions for termination and renewal to manage their obligations effectively.