What level of compliance with the terms and conditions of the agreement is required for a City Wide franchisee to be granted a Successor Term?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
2.2.5 Franchisee must not be in default of any provision of this Agreement, any amendment to this Agreement, or any other agreement between CITY WIDE or its respective subsidiaries or affiliates, and at all times Franchisee must have substantially complied with all the terms and conditions of this Agreement and any other agreements between the parties during the respective Terms, including but not limited to then current Annual Revenue Per Capita Growth requirement (See Section 6.5).
2.2.6 Franchisee's operation of the Franchised Business must be in full compliance with the standards, specifications, requirements, instructions set forth in this Agreement and in the Operating Manual of CITY WIDE.
2.2.7 Franchisee's operations under all other Franchise Agreements, if any, must be in full compliance with the standards, specifications, requirements, instructions set forth under all other Franchise Agreements and in the Operating Manual of CITY WIDE.
2.2.8 Franchisee must have satisfied all monetary obligations Franchisee owes to CITY WIDE and its subsidiaries and affiliates and timely met such obligations throughout the respective Term.
2.2.9 Franchisee must execute the form of franchise agreement being used by CITY WIDE at the time Franchisee renews, including the Successor Addendum (See Attachment J) (collectively, "Successor Franchise Agreement"), which Successor Franchise Agreement will in all respects supersede this Agreement and the terms of which may differ from the terms of this Agreement, including, without limitation, a higher percentage Royalty Fee (See Section 3.7.1) and Marketing Fee (See Section 3.7.2(a).
2.2.10 Franchisee must pay CITY WIDE a renewal fee ("Successor Fee") equal to fifty percent (50%) of the then-current Initial Franchise Fee set forth in the Franchise Disclosure Document , at the time Franchisee executes the Successor Franchise Agreement which amount will be instead of payment of a new Initial Franchise Fee.
2.2.11 Franchisees must comply with CITY WIDE's then-current criteria for operating a Franchised Business, including CITY WIDE's then-current franchisee qualification and training requirements.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, a franchisee seeking a Successor Term must meet several compliance requirements. The franchisee must not be in default of any provision of the Franchise Agreement, any amendments to it, or any other agreements with City Wide or its affiliates. Furthermore, the franchisee must have substantially complied with all terms and conditions of these agreements throughout the term, including meeting the then-current Annual Revenue Per Capita Growth requirement. This indicates that merely avoiding default is not enough; City Wide expects active and demonstrable adherence to the agreement's stipulations.
In addition to general compliance, the franchisee's operation of the franchised business must be in full compliance with the standards, specifications, requirements, and instructions set forth in the Franchise Agreement and the City Wide Operating Manual. If the franchisee operates under other franchise agreements with City Wide, those operations must also be in full compliance. The franchisee must also have satisfied all monetary obligations to City Wide and its subsidiaries and affiliates, and have met these obligations in a timely manner throughout the term. This highlights the importance of maintaining operational and financial integrity to be considered for a renewal.
Beyond past performance, the franchisee must also meet certain conditions at the time of renewal. They must execute the current form of the franchise agreement, including a Successor Addendum, which may contain different terms from the original agreement, such as potentially higher royalty and marketing fees. The franchisee must also pay a Successor Fee equal to fifty percent (50%) of the then-current Initial Franchise Fee. Finally, the franchisee must comply with City Wide's then-current criteria for operating a franchised business, including qualification and training requirements. These stipulations ensure that franchisees seeking to renew are up-to-date with City Wide's standards and are committed to the brand's future direction.