Is City Wide obligated to extend credit to franchisees?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee acknowledges that nothing contained in this Agreement constitutes agreement by CITY WIDE to accept any payments after they are due or to extend credit to or otherwise finance Franchisee's operation of the Franchised Business.
Further, Franchisee acknowledge that Franchisee's failure to pay all amounts when due will constitute a material default and grounds for termination of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to the 2025 City Wide Franchise Disclosure Document, City Wide is not obligated to extend credit to franchisees. The agreement explicitly states that nothing within it constitutes an agreement by City Wide to extend credit or finance the franchisee's business operations.
This means that prospective City Wide franchisees must secure their own financing to cover the costs of starting and operating the franchise. Franchisees should not rely on City Wide to provide any form of credit or financial assistance.
Furthermore, the FDD emphasizes that failure to pay amounts when due constitutes a material default and can lead to termination of the franchise agreement. This underscores the importance of franchisees having sufficient capital and managing their finances effectively to meet their obligations to City Wide.