Who is responsible for repaying City Wide for costs incurred when City Wide effects repairs on behalf of the franchisee?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
ranchisee will maintain the condition and appearance of the Office of the Franchised Business consistent with CITY WIDE standards, as set forth in the Operating Manual and otherwise in writing. Franchisee will maintain such premises as CITY WIDE may from time to time require to maintain or improve the appearance and efficient operation of the Franchised Business, including, but not limited to, replacement of worn out or obsolete fixtures and signs, and repair of the Location. If any time in CITY WIDE's judgment the general state of repair or the appearance of the premises of the Franchised Business or its equipment, fixtures, or signs does not meet CITY WIDE's standards, CITY WIDE will so notify Franchisee and specify the action Franchisee must take to correct such deficiency. If Franchisee fails or refuses to initiate within thirty (30) calendar days after receipt of such notice, and continues to fail to implement a bona fide program to complete any required maintenance, CITY WIDE will have the right, in addition to all other remedies, to enter upon the premises of the Franchised Business and effect such repairs, painting, maintenance or replacements of equipment, fixtures or signs on Franchisee's behalf and Franchisee will repay CITY WIDE the entire costs on demand. If Franchisee fails to make any such payments or remedy operational deficiencies, such failure will constitute a material breach of this Agreement and CITY WIDE may terminate this Agreement. Except for
those repairs that would constitute a public health or safety hazard, or are required by any governmental agency, any such remodeling requirement will be imposed only in a nondiscriminatory manner upon (i) all comparably situated CIT
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, the franchisee is responsible for repaying City Wide for costs incurred if City Wide undertakes repairs, painting, maintenance, or equipment, fixture, or sign replacements on the franchisee's behalf. This occurs if the franchisee fails to maintain the condition and appearance of their office according to City Wide's standards and does not initiate or complete required maintenance within 30 days of receiving notice from City Wide. The franchisee must repay the entire costs to City Wide on demand.
This provision ensures that City Wide can enforce brand standards and maintain a consistent image across all franchise locations. If a franchisee neglects necessary upkeep, City Wide has the right to step in and ensure the premises meet the required standards. The franchisee bears the financial responsibility for this intervention, incentivizing them to proactively maintain their location.
However, there are some limitations to this requirement. Remodeling requirements, unless related to public health or safety hazards or required by a governmental agency, must be imposed nondiscriminatorily on all similarly situated City Wide franchisees and company-owned businesses. Additionally, any capital expenditure exceeding $25,000 will only be required if there is sufficient time remaining in the franchise term to fully amortize or depreciate the expenditure under the Internal Revenue Code. This provides some protection to franchisees against large, unexpected expenses late in their franchise agreement.
Failure to make these payments or remedy operational deficiencies constitutes a material breach of the Franchise Agreement, potentially leading to termination. This underscores the importance of franchisees adhering to City Wide's standards and addressing any maintenance issues promptly to avoid financial penalties and potential loss of their franchise.