How long does City Wide have to notify a franchisee of its intent to purchase the City Wide business after termination or expiration?
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). |
| o. | Franchisor's option to purchase your business | Section 20 | When the Agreement terminates or expires, CITY WIDE will have an option, but not an obligation, to purchase from you any assets of the Franchised Business and any materials containing the Marks at the lower of fair market value or your cost; CITY WIDE must notify you within 60 days after the termination or expiration. CITY WIDE shall have up to six months to pay the entirety of the agreed upon purchase price. |
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 an option to purchase the assets of a franchised business after the franchise agreement terminates or expires. If City Wide chooses to exercise this option, they must notify the franchisee within 60 days after the termination or expiration of the agreement. This notification period allows the franchisee to understand City Wide's intentions regarding the business's assets.
This provision is important for a prospective franchisee because it clarifies the timeline for City Wide's decision-making process post-termination or expiration. Knowing that City Wide has 60 days to notify the franchisee provides a defined waiting period, allowing the franchisee to plan accordingly. Without this information, a franchisee might face uncertainty about the future of their business assets.
Furthermore, the FDD states that City Wide has up to six months to pay the agreed-upon purchase price. This extended payment period offers City Wide flexibility in financing the purchase but also means the franchisee may need to wait up to six months to receive full payment for the assets. Franchisees should consider this potential delay in their financial planning if termination or expiration is anticipated.
It is also important to note that City Wide is not obligated to purchase the assets; they have an option, not a requirement. The purchase price will be the lower of the fair market value or the franchisee's cost, which could impact the financial outcome for the franchisee. Therefore, understanding the asset valuation process is crucial for any potential City Wide franchisee.