What is the purpose of the franchisee providing proof of sufficient assets to City Wide?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3.3 Proof of Sufficient Assets. Within thirty (30) days after the execution of this Agreement, Franchisee must obtain, secure and furnish adequate proof of financing or furnish proof of the existence of assets in Franchisee's sole control, that is sufficient and in acceptable form to CITY WIDE, to fully and completely discharge the obligations of this Agreement (except Franchisee's continuing Royalty Fee and Marketing Fee contributions, and any other continuing obligation Franchisee owes CITY WIDE during the term of this Agreement, as defined and outlined in this Agreement). CITY WIDE will have the sole and absolute right to determine the sufficiency of all such proof of financing or assets. CITY WIDE will not begin training until Franchisee satisfies this requirement.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, within 30 days of signing the franchise agreement, a franchisee must provide City Wide with proof of adequate financing or assets. This proof must be sufficient, in a form acceptable to City Wide, to cover all obligations under the agreement. However, this excludes ongoing royalty and marketing fees, and any other continuous obligations the franchisee owes City Wide during the agreement's term.
City Wide retains the sole right to determine if the provided proof of financing or assets is sufficient. This requirement must be met before City Wide will begin the franchisee's training program. This ensures that the franchisee has the financial capacity to meet the initial financial demands of establishing and operating the franchise.
This requirement protects City Wide by ensuring franchisees are financially stable before commencing operations. It reduces the risk of franchisees defaulting on their initial obligations. For a prospective franchisee, this means they need to have readily available funds or financing in place to satisfy City Wide's requirements before training can begin.