What is the scope of City Wide's control over the response to a Cyber Event?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee will exert its best efforts to protect each Technology System against a cyber event including any claims related to data breach, identify theft or theft of personal information ("Cyber Event").
If a Cyber Event occurs, City Wide reserves the right, but shall not have any obligation, to perform and/or control and/or cause its third-party consultants to perform and/or control all aspects of the response to the Cyber Event including, without limitation, the investigation, containment and resolution of the Cyber Event and all communications.
City Wide's control of the response to a Cyber Event shall not create any liability for City Wide or additional rights for Franchisee, entitle Franchisee to damages or relieve Franchisee of Franchisee's indemnification obligations under Section 7.
Franchisee shall reimburse City Wide for all of City Wide's out-of-pocket costs and expenses incurred in responding to and remedying any Cyber Event if such Cyber Event is conclusively determined to have been caused solely by Franchisee or directly related to Franchisee's Franchised Business operations.
- k.
Franchisee shall at all times be compliant with applicable laws regarding data privacy, data security and security breaches.
Franchisee shall obtain advice from Franchisee's own legal and security consultants to ensure that Franchisee operates the Franchised Business at all times in full compliance with the data security safeguards.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, franchisees are expected to protect the Technology System against cyber events, including data breaches and identity theft. However, City Wide retains significant control over the response to such events.
City Wide reserves the right, but not the obligation, to manage all aspects of the response to a Cyber Event. This includes the investigation, containment, and resolution of the event, as well as all related communications. This control does not create any liability for City Wide, grant additional rights to the franchisee, entitle the franchisee to damages, or relieve the franchisee of their indemnification obligations.
Franchisees may be required to reimburse City Wide for all out-of-pocket costs and expenses incurred in responding to and remedying a Cyber Event if the event was caused solely by the franchisee or directly related to the franchisee's business operations. Franchisees are also responsible for complying with all applicable laws regarding data privacy, data security, and security breaches, and should seek advice from their own legal and security consultants to ensure compliance.
This means that while franchisees have a duty to protect against cyber threats, City Wide has the authority to step in and manage the response if an event occurs. Franchisees could face significant costs if they are deemed responsible for the Cyber Event. It is important for prospective franchisees to understand their responsibilities and potential liabilities related to data security and cyber events.