How long does City Wide have to exercise its right of first refusal to acquire a City Wide franchise?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary | |
|---|---|---|---|
| reasonable attorneys' | |||
| fees, incurred by CITY | |||
| WIDE subsequent to termination or expiration in | |||
| connection with obtaining injunctive or other relief | |||
| under the Franchise Agreement; provide all signage | |||
| to CITY WIDE; and take further action as may be | |||
| required by the Operating | |||
| Manual or reasonably | |||
| requested by CITY WIDE; and, if due to your | |||
| default, forfeit any royalty rebate. | |||
| j. | Assignment of contract by | Section 13 | No restriction on CITY WIDE's |
| Franchisor | right to assign. | ||
| k. | "Transfer" by you – definition | Section 13 | Includes transfer of contract or assets or change in ownership. |
| l. | Franchisor's approval of transfer by you | Section 13 | CITY WIDE has the right to approve all transfers, but will not unreasonably withhold approval. |
| m. | Conditions for Franchisor's approval of transfer | Section 13 | You must ask CITYWIDE at least 60 days before to approve a transfer; you must pay a Transfer Fee equal to $25,000 and pay any applicable third-party broker fee; you must be in compliance with the Franchise Agreement and Operating Manual; transferee must meet CITY WIDE's standards, agree to make required upgrades, sign the current form of franchise agreement, and pay all required fees (including Initial Fees). |
| n. | Franchisor's right of first refusal to acquire your business | Section 20 | If you propose to sell the Franchised Business, its assets or part of the ownership of Franchisee, CITY WIDE will have a right of first refusal for 60 days to purchase for the price, terms and conditions offered to you (except CITY WIDE may substitute cash for payment terms). |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 44–47)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, City Wide has 60 days to exercise its right of first refusal if a franchisee proposes to sell their franchised business, its assets, or part of the ownership of the franchise. This right allows City Wide to purchase the business at the same price, terms, and conditions offered to the franchisee by a third party, with the exception that City Wide can substitute cash for payment terms.
This right of first refusal is a common provision in franchise agreements. It allows the franchisor to maintain control over who enters the City Wide system and ensures that any new franchisee meets their standards. For a franchisee, this means that before selling their business to a third party, they must first offer it to City Wide, potentially delaying the sale process.
However, the franchisee can proceed with the sale to the third party if City Wide declines to exercise its right within the 60-day period. This provision aims to protect the integrity and consistency of the City Wide brand and operational standards, while also providing a mechanism for franchisees to eventually exit the system.