What is the process for City Wide to terminate the franchise agreement after a failure to cure a default?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee will be deemed to be in default under this Agreement and CITY WIDE may elect to terminate this Agreement and all rights granted under this Agreement if within thirty (30) days after CITY WIDE sends Franchisee written notification setting out the nature of the default ("Notice to Cure"), or within any such period set forth in this Agreement or permissible by law, Franchisee does not correct the default to CITY WIDE's satisfaction:
Upon the occurrence of any event of default enumerated in Sections 14.1 or 14.2 of this Agreement, or upon termination pursuant to Section 14.5 of this Agreement, and upon Franchisee's failure to cure such default within the applicable period for cure, if any, then subject to the expiration of any minimum time period provided for by applicable law, this Agreement and all Franchisee's rights under it will immediately terminate without further notice or action by CITY WIDE; provided; however, that the rights, duties, covenants, and obligations of the parties to this Agreement will survive the end of the Term of this Agreement only insofar as they set out obligations or duties owed by Franchisee to CITY WIDE ("Surviving Provisions").
In addition to CITY WIDE's right to terminate this Agreement, and not in lieu of such right or any other rights against Franchisee, if Franchisee has not cured a default under this Agreement within the time allotted by CITY WIDE after receipt of the Notice to Cure from CITY WIDE, CITY WIDE may, at its option, enter the premises of the Franchised Business and exercise complete authority with respect to its operation until such time as CITY WIDE determines that Franchisee's default has been cured and that there is compliance with the requirements of this Agreement.
Franchisee specifically agrees that a Representative (as defined in Section 16) of CITY WIDE may take over, control, and operate the business, and that Franchisee will pay CITY WIDE a service fee of not less than Three Hundred Dollars ($300) per day plus all travel expenses, room and board and other expenses reasonably incurred by such Representative so long as it will be required by the Representative to enforce compliance.
14.9 If this Agreement is terminated by the Franchisor due to an uncured breach by Franchisee, Franchisee will forfeit all rights Franchisee may have otherwise had in and to any Royalty Rebate if the Agreement were not terminated.
15.2 At the end of the Term of this Agreement, whether because of an event of default pursuant to Section 14 above or otherwise, Franchisee will immediately do each of the following:
15.2.1 Cease to be a franchisee of CITY WIDE and cease to operate the former Franchised Business or any other business using any part of the System or Marks.
After that Franchisee will not, directly or indirectly, represent to the public that the former Franchised Business is or was operated in any way connected with the System or hold itself out as a present or former franchisee of CITY WIDE.
- 15.2.2 Pay all sums owing to CITY WIDE.
Upon termination of this Agreement for any default by Franchisee, such sums will include lost Royalties Fees, Marketing Fees and other fees for the remainder of the Term, and other damages, costs, and expenses incurred by CITY WIDE as a result of the default.
- 15.2.3 Cease to use and destroy all tangible copies of the Operating Manual, the Software, and all other Confidential Information together with all equipment and other property owned by CITY WIDE.
Franchisee will retain no copy or record of any of the foregoing; provided, however, that Franchisee may retain Franchisee's copy of this Agreement, a copy of any correspondence between the parties, and a copy of any other document which Franchisee needs for compliance with any applicable provision of law.
15.2.4 Change all phone numbers then listed under any Mark owned by CITY WIDE and assign to CITY WIDE the right to use all such phone numbers.
15.2.5 Provide CITY WIDE with a complete list of Franchisee's employees, subcontractors and suppliers, their respective addresses, and any outstanding amounts Franchisee may owe to any third party.
15.2.6 Provide CITY WIDE with a complete list of all customers for the past three years, subcontractors, contacts names, and the like, including all address and telephone information for each name listed.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, City Wide can terminate the franchise agreement if a franchisee fails to correct a default to City Wide's satisfaction within thirty (30) days after City Wide sends written notification of the default (a "Notice to Cure"). The cure period could be different if another period is set forth in the agreement or permissible by law.
Upon the occurrence of any default as outlined in Sections 14.1 or 14.2 of the agreement, or upon termination pursuant to Section 14.5, and if the franchisee fails to cure the default within the applicable cure period, the agreement and all rights under it will immediately terminate without further notice or action by City Wide. This is subject to any minimum time period provided by applicable law. Certain obligations of both parties, such as those relating to the use and protection of City Wide's marks, confidentiality, non-competition, and post-termination obligations, will survive the termination of the agreement.
In addition to City Wide's right to terminate, if a franchisee has not cured a default within the allotted time after receiving a Notice to Cure, City Wide has the option to enter the premises of the franchised business and take control of its operation until City Wide determines the default has been cured and the franchisee is in compliance with the agreement. If City Wide chooses to operate the business, the franchisee must pay City Wide a service fee of not less than $300 per day, plus all travel expenses, room and board, and other expenses reasonably incurred by City Wide's representative. The franchisee also agrees to indemnify and hold harmless City Wide and its representatives for any acts or omissions related to the operation of the business during this period.
If the franchise agreement is terminated by City Wide due to an uncured breach by the franchisee, the franchisee will forfeit all rights to any Royalty Rebate they may have had if the agreement were not terminated. After termination, the franchisee must cease operating as a City Wide franchisee, discontinue using the City Wide system or marks, pay all sums owed to City Wide (including lost royalties and fees for the remainder of the term), destroy all copies of the operating manual and confidential information, change phone numbers listed under City Wide's marks, and provide City Wide with lists of employees, subcontractors, suppliers, and customers.