Who must sign the Non-Compete Agreement for a City Wide franchise?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
must sign an agreement guaranteeing Franchisee's obligations under the Franchise Agreement (See Section 12.3 of the Franchise Agreement and Attachment A to the Franchise Agreement). Each partner, shareholder, director, officer, or member of a Franchisee and, if applicable, any spouses or domestic partners of each partner, shareholder, director, officer, or member of Franchisee and Manager must sign the Non-Compete Agreement contained in the Franchise Agreement.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 43)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, several parties associated with the franchise must sign the Non-Compete Agreement. This includes the franchisee themselves, as well as any full-time manager appointed to handle daily operations, provided the manager meets specific criteria. The manager must reside full-time within the designated territory, hold at least a 20% ownership interest in the franchise, and meet City Wide's qualifications for new franchisees.
Additionally, if the franchisee is a partnership, each partner must sign the agreement. If the franchisee is a corporation, each shareholder, director, and officer must sign. Similarly, if the franchisee is a limited liability company, each member must sign the Non-Compete Agreement. Furthermore, any spouses or domestic partners of these individuals (partner, shareholder, director, officer, or member) must also sign the agreement.
This requirement ensures that all individuals with a significant stake in the City Wide franchise or access to confidential information are bound by the non-compete terms, protecting City Wide's interests and trade secrets. This is a common practice in franchising to prevent unfair competition and maintain brand integrity.