What is the purpose of the 'RECITALS' section in relation to the City Wide Franchise Agreement?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
RECITALS:
- A. CITY WIDE and Franchisee have entered into a CITY WIDE Franchise Agreement dated of even date herewith. ("Franchise Agreement").
- B. CITY WIDE and Franchisee understand and acknowledge that the recitals (stated in the Franchise Agreement and as captioned "WITNESSETH"), all definitions, all acknowledgments, and all warranties stated in the Franchise Agreement are incorporated herein by reference; and
- C. CITY WIDE and Franchisee desire to enter into a Non-Compete Agreement as provided herein.
NOW, THEREFORE, the parties, in consideration of the undertakings and commitments of each party to the other set forth in the Franchise Agreement, hereby agree as follows:
-
- Unless otherwise specified, the meaning of the term "Franchisee" as used herein will include, collectively and individually, all officers, directors, and holders of a beneficial interest, at any time during the term of this Non-Compete Agreement, of the securities of Franchisee, and of any corporation directly or indirectly controlling Franchisee, if Franchisee is a corporation; and the general partners and any limited partner owning any percentage of Franchisee if a partnership.
-
- For the purposes of this agreement, the term "Franchised Business" (as defined in the Franchise Agreement) will be further modified to mean use of CITY WIDE's System and Marks at the following location ("Location"):
The franchise Territory consists solely of the following:
ATTACHMENT B TO THE FRANCHISE AGREEMENT - DESIGNATED TERRITORY
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, the 'RECITALS' section in various agreements related to the franchise, such as the Business Development Center Agreement and Non-Compete Agreement, serve to provide context and background for the agreement. These recitals outline the understandings and intentions of both City Wide and the franchisee.
Specifically, the recitals may reference the existing Franchise Agreement between City Wide and the franchisee, acknowledging the franchisee's right to operate a City Wide franchise in a designated territory. They also express the franchisee's desire to utilize City Wide's Business Development Center for assistance in prospecting and developing local clientele. Furthermore, the recitals can incorporate definitions, acknowledgments, and warranties stated in the Franchise Agreement by reference, ensuring these elements are integrated into the new agreement.
In the context of a Confidentiality Agreement, the recitals establish that City Wide owns a unique system and that discussions between City Wide and a prospective franchisee may involve disclosing proprietary information. By including these recitals, the agreements clarify the purpose and scope, setting the stage for the legally binding terms and conditions that follow. The recitals are incorporated by reference into the agreement, reinforcing their importance.