Does City Wide have the right to approve all transfers by the franchisee?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in | Summary |
|---|---|---|
| l. Franchisor’s approval of transfer | Section 13 | CITY WIDE has the right to approve all transfers, |
| by you | but will not unreasonably withhold approval. | |
| m. Conditions for Franchisor’s approval of transfer | Section 13 | You must ask CITYWIDE at least 60 days before to approve a transfer; you must pay a Transfer Fee equal to $25,000 and pay any applicable third-party broker fee; you must be in compliance with the Franchise Agreement and Operating Manual; transferee must meet CITY WIDE’s standards, agree to make required upgrades, sign the current form of franchise agreement, and pay all required fees (including Initial Fees). |
| n. Franchisor’s right of first refusal to acquire your business | Section 20 | If you propose to sell the Franchised Business, its assets or part of the ownership of Franchisee, CITY WIDE will have a right of first refusal for 60 days to purchase for the price, terms and conditions offered to you (except CITY WIDE may substitute cash for payment terms). |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 44–47)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, City Wide retains the right to approve all transfers initiated by a franchisee. However, this approval will not be unreasonably withheld. A transfer is defined broadly, including the transfer of the franchise contract, its assets, or any change in the ownership of the franchise.
To gain City Wide's approval for a transfer, a franchisee must adhere to specific conditions. The franchisee must request approval at least 60 days in advance of the proposed transfer date. Additionally, the franchisee is responsible for paying a $25,000 transfer fee, along with any applicable third-party broker fees. The franchisee must also be in full compliance with both the Franchise Agreement and the City Wide Operating Manual.
The prospective transferee must also meet City Wide's standards. This includes agreeing to make any required upgrades to the business, signing the current version of the franchise agreement, and paying all required fees, including initial franchise fees. These stipulations ensure that any new franchisee is well-prepared and capable of upholding City Wide's standards and operational practices.
Furthermore, if a franchisee proposes to sell their City Wide franchise, its assets, or any part of the ownership, City Wide has a right of first refusal. This means City Wide has the option to purchase the franchise on the same terms and conditions offered to the franchisee by a third party, except City Wide can substitute cash for payment terms. This right extends for 60 days, giving City Wide the opportunity to maintain control over its franchise network.