What rights does City Wide retain regarding costs incurred during the relocation of a City Wide Franchised Business?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
CITY WIDE will permit you to relocate your Franchised Business to an alternate territory within the same general vicinity ("Substitute Designated Territory"), which, at CITY WIDE's sole and absolute right, is a suitable location for the operation of the Franchised Business, if at the sole and absolute judgment of CITY WIDE, changes in the character of the Designated Territory are sufficiently detrimental to warrant relocation of the Franchised Business to the Substitute Designated Territory. CITY WIDE reserves the right to charge you a reasonable relocation fee as a condition of approval of any Substitute Designated Territory for the Franchised Business. Any such relocation will be at Franchisee's sole expense and CITY WIDE will have the right to charge Franchisee for any costs incurred by CITY WIDE, and a reasonable fee for its services, in connection with any such relocation of the Franchised Business.
Source: Item 12 — TERRITORY (FDD pages 36–39)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, City Wide retains specific rights regarding the costs associated with relocating a franchised business. If City Wide, at its sole discretion, deems it necessary for a franchisee to relocate to a "Substitute Designated Territory" due to detrimental changes in the original territory's character, City Wide has the right to charge the franchisee for any costs it incurs during the relocation. Additionally, City Wide can charge a reasonable fee for its services related to the relocation.
This means that while City Wide may allow a franchisee to relocate if the original territory becomes unfavorable, the franchisee is responsible for covering all expenses associated with the move. This includes not only the direct costs of physically moving the business but also any fees City Wide charges for its involvement in the relocation process. The FDD specifies that the relocation is at the franchisee's "sole expense," emphasizing the financial burden on the franchisee.
For a prospective franchisee, this highlights a potential financial risk. If the business environment in the designated territory declines, relocation might become necessary, but it would come at a significant cost. It is important for potential franchisees to assess the stability and potential for change in their designated territory and to factor in the possibility of relocation expenses when evaluating the overall investment. Understanding the conditions under which City Wide might require or approve a relocation, and the potential costs involved, is crucial for making an informed decision.
It is also important to note that City Wide's approval of a "Substitute Designated Territory" is at their "sole and absolute right", meaning they have the final say on whether a proposed new location is suitable. This further emphasizes the importance of a thorough initial territory assessment and a clear understanding of City Wide's relocation policies.