Does City Wide have the option to purchase a franchisee's City Wide business upon termination or expiration of the agreement?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in | Summary |
|---|---|---|
| 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 the option to purchase a franchisee's business upon termination or expiration of the franchise agreement. Specifically, City Wide has the option, but not the obligation, to purchase any assets of the franchised business and any materials containing City Wide's marks. The purchase price will be the lower of the fair market value or the franchisee's cost.
City Wide must notify the franchisee of its intent to exercise this option within 60 days after the termination or expiration date. City Wide then has up to six months to pay the agreed-upon purchase price in full.
This clause is important for prospective franchisees to understand, as it dictates the terms under which City Wide can acquire the business's assets upon the end of the franchise agreement. Franchisees should consider how this might affect their exit strategy and the potential value they could receive for their business assets.