Is City Wide required to obtain the franchisee's consent to reduce the scope of the non-compete agreement?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee understands and acknowledges that CITY WIDE will have the right, in its sole and absolute discretion, to reduce the scope of any covenant set forth in Paragraphs 3 and 4 in this Non-Compete Agreement, or any portion thereof, without Franchisee's consent, effective immediately upon receipt by Franchisee of written notice thereof, and Franchisee will comply forthwith with any covenant as so modified, which will be fully enforceable notwithstanding any contrary provisions of the Franchise Agreement, if any.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, City Wide does not need the franchisee's consent to reduce the scope of the non-compete agreement. City Wide has the right to reduce the scope of the non-compete agreement at its discretion.
Specifically, City Wide can modify the non-compete agreement without the franchisee's consent. This modification becomes effective immediately once the franchisee receives written notice. The franchisee is then obligated to comply with the modified covenant, and this modified version is fully enforceable, regardless of any conflicting provisions in the Franchise Agreement.
This clause gives City Wide significant flexibility to adjust the non-compete terms as they see fit, which could be beneficial in some situations but also carries the risk that the franchisee's rights could be altered without their direct agreement. Prospective franchisees should carefully consider this provision and its potential impact on their business operations and future opportunities.