What sections of the City Wide Franchise Agreement and attachments detail the franchisee's obligations related to guarantee and assumption?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
agreements heretofore or hereafter granted to other CITY WIDE System franchise owners in a non-uniform manner, unless otherwise required by this Agreement or by law.
24.6 No amendment, change or variance from this Agreement shall be binding upon either CITY WIDE or Franchisee except by mutual written agreement. If an amendment of this Agreement is executed at Franchise Owner's request, any legal fees or costs of preparation in connection therewith shall, at the option of CITY WIDE, be paid by Franchisee.
SECTION 25. Franchisee Defined and Guaranty
As used in this Agreement, the terms "Franchisee" and "Franchisee's" will include all persons who succeed to the interest of the original Franchisee by transfer or operation of law. If Franchisee is a legal entity, then at least one natural person will have at least a majority ownership interest in Franchisee. By their signatures to this Agreement, all partners, shareholders, officers, and directors of the entity that sign this Agreement as Franchisee acknowledge and accept the duties and obligations imposed upon each of them, individually, by the terms of this Agreement. The singular usage includes the plural, and the masculine usage includes the feminine. All partners, shareholders, officers, and directors of the entity executing the Franchise Agreement are required to execute the Guaranty and Assumption of Obligations which is attached to this Franchise Agreement as Attachment A-1. Additionally, spouses or domestic partners of principals, owners or stockholders will be required to provide a conditional guaranty of payment in the form attached to this Agreement as Attachment A-2.
**SECTION 26.
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 28–29)
What This Means (2025 FDD)
According to the 2025 City Wide Franchise Disclosure Document, Section 25 of the Franchise Agreement defines the term "Franchisee" to include anyone who succeeds to the original franchisee's interest. If the franchisee is a legal entity, at least one natural person must have a majority ownership interest. All partners, shareholders, officers, and directors who sign the agreement as the franchisee acknowledge and accept the duties and obligations imposed on them individually by the agreement's terms. The agreement specifies that all partners, shareholders, officers, and directors of the entity executing the Franchise Agreement must execute the Guaranty and Assumption of Obligations, which is attached to the Franchise Agreement as Attachment A-1. Additionally, spouses or domestic partners of principals, owners, or stockholders will be required to provide a conditional guaranty of payment in the form attached to the Agreement as Attachment A-2. These attachments and Section 25 outline the obligations related to guarantee and assumption for City Wide franchisees.
Attachment A-1, as referenced in Section 25, is the Guaranty and Assumption of Obligations that all partners, shareholders, officers, and directors of the franchisee entity must execute. Attachment A-2 is a conditional guaranty of payment required from spouses or domestic partners of the principals, owners, or stockholders. These attachments, along with Section 25, clarify who is required to provide a guarantee and assume obligations under the Franchise Agreement.
The Spousal Guarantor's obligations are further detailed in a separate section, specifying that the Spousal Guarantor unconditionally guarantees the punctual payment of all the franchisee's obligations under the Franchise Agreement. This includes fees, expenses, and interest. The Spousal Guarantor also agrees to cover any expenses, including attorney fees, incurred by City Wide in enforcing its rights under this guaranty, with some limitations outlined in Section 5. The liability of the Spousal Guarantor is absolute and unconditional, regardless of the validity or enforceability of the Franchise Agreement or any changes to the payment terms or waivers.