What obligations does a City Wide franchisee have upon termination or non-renewal of the franchise agreement?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
tain important provisions of the Franchise Agreement and related agreements. You should read these provisions in the agreements attached to this disclosure document.**
FRANCHISE AGREEMENT
| Provision | Section in | Summary |
|---|---|---|
| Franchise Agreement | 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 right to assign. |
| Franchisor | ||
| k. “Transfer” by you – definition | Section 13 | Includes transfer of contract or assets or change in ownership. |
| l. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 44–47)
What This Means (2025 FDD)
According to the 2025 City Wide Franchise Disclosure Document, franchisees have specific obligations upon termination or non-renewal of their franchise agreement. These obligations, as detailed in Section 15 of the Franchise Agreement, include responsibility for reasonable attorneys’ fees incurred by City Wide to obtain injunctive or other relief under the Franchise Agreement after termination or expiration. Additionally, franchisees must provide all signage to City Wide and take any further actions required by the Operating Manual or reasonably requested by City Wide.
Furthermore, if the termination is due to the franchisee's default, they may forfeit any royalty rebate. Beyond these immediate actions, a significant restriction is placed on the franchisee's ability to engage in similar business activities. For a period of two years after the franchise agreement terminates or expires, the franchisee is prohibited from involvement in any competing business within their Designated Territory.
This non-compete clause also extends to the Standard Metropolitan Statistical Area (SMSA) where the Franchised Business Location is situated, or within 150 miles of any other City Wide location, whether franchised or operated by City Wide or its franchisees or affiliates. These post-termination obligations are typical in franchising to protect the brand and its network of franchisees, but the specific terms should be carefully considered by potential franchisees to understand the full scope of their responsibilities and limitations.