What payments and obligations must a City Wide franchisee fulfill before consummating a transfer?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
- 13.4.5 If CITY WIDE approves the proposed transferee, Franchisee, the Affiliated Company, or the Owner may transfer the interest to the proposed transferee pursuant to a form of transfer or assignment approved in advance by CITY WIDE at a price and under terms and conditions which are not more favorable than the terms offered to CITY WIDE, but only after the proposed transferee has completed (to the satisfaction of CITY WIDE) the initial training then currently required of System franchisees and has paid CITY WIDE all fees associated with such training, as assessed by CITY WIDE at its sole and absolute right;
- 13.4.6 Prior to the consummation of any such Transfer, Franchisee will pay all amounts due to CITY WIDE and cure all other breaches of this Agreement and any other agreement with CITY WIDE, and Franchisee will execute and deliver to CITY WIDE a general and absolute release in a form satisfactory to CITY WIDE, of any and all claims against CITY WIDE or its affiliates, officers, directors, employees, agents, and representatives;
- 13.4.7 Franchisee will comply with all other applicable transfer requirements as designated in the Operating Manual or otherwise by CITY WIDE in writing.
- 13.4.8 Franchisee will be required to pay to CITY WIDE the Transfer Fee as set forth below in Section 13.5.
- 13.4.9 CITY WIDE may require any transferee of any shares of stock or interest of any kind or nature in Franchisee, any Affiliated Company, or the Owner and his/her spouse or domestic partner to guarantee the obligations of Franchisee under this Agreement or under any new Franchise Agreement entered pursuant to Section 13.4.10 below.
- 13.4.10 Prior to the consummation of any Transfer under this Section 13.4, Franchisee and the prospective transferee will jointly request that CITY WIDE inspect of the Location and of Franchisee's books and records. As a result of such inspection, CITY WIDE may prepare a list setting forth the necessary repairs, maintenance, or other upgrades of the Location which will be required before CITY WIDE approves the Transfer, and CITY WIDE may also require that Franchisee pay any additional fees due CITY WIDE which may discovered as a result of the inspection.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, a franchisee must meet several conditions before transferring their franchise. Prior to the transfer, the franchisee must pay all outstanding amounts owed to City Wide and resolve any existing breaches of the franchise agreement or any other agreements with City Wide. Additionally, the franchisee must provide City Wide with a general release of all claims against them, in a form that is satisfactory to City Wide.
Furthermore, the prospective transferee must complete the initial training program that City Wide requires of all new franchisees and pay any associated training fees, as determined by City Wide. The franchisee must also adhere to all other applicable transfer requirements as outlined in the City Wide operating manual or communicated in writing by City Wide.
Finally, the franchisee is required to pay City Wide a transfer fee. City Wide may also require the transferee to guarantee the franchisee's obligations under the existing agreement or any new franchise agreement. City Wide may also require repairs, maintenance, or upgrades to the location or payment of additional fees discovered during an inspection before approving the transfer.