Does City Wide have sole discretion regarding the approval of a manager?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
- (d) Manager must live in the Designated Territory and must devote fulltime, year round and best efforts to supervising the operation of the Franchised Business on a daily basis.
CITY WIDE reserves the right to request proof of residency of either Franchisee or your Manager, as applicable, and proof of your Manager's ownership interest, if you nominate a Manager.
(e) The Manager must sign the Guaranty and Assumption of Obligations, the Confidentiality Agreement, and the Non-Compete Agreement, attached hereto as Attachments A, E and F respectively.
(f) The Franchised Business must remain in the top twenty-five percent (25%) of the System in terms of Annual Revenue Per Capita Growth or a similar metric established from time to time by CITY WIDE.
(g) Within five (5) business days of the Manager's separation from day-today operations of the Franchised Business, the Franchisee will immediately assume the day-to-day responsibilities of operating the Franchised Business unless or until a replacement Manager is appointed, in accordance to and subject to terms of this Agreement and the Operating Manual.
7.11.2 CITY WIDE's approval of the Manager may be withdrawn if Franchisee is in default of this Agreement.
7.11.3 From time to time, CITY WIDE may modify the criteria outlined herein and in the Operating Manual to establish new criteria as it relates to the appointment of the Manager.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, City Wide retains significant control over the approval of a manager for a franchise. Specifically, City Wide can withdraw approval of a manager if the franchisee is in default of the franchise agreement. Furthermore, City Wide may modify the criteria for manager appointments over time, indicating ongoing evaluation and potential changes to the approval process.
This level of control means that a prospective City Wide franchisee needs to understand that their choice of manager is subject to City Wide's standards and ongoing assessment. The franchisee must ensure their manager meets not only the initial criteria but also any new criteria City Wide establishes. This could involve additional training or adherence to specific performance metrics.
Moreover, the manager is required to live in the Designated Territory and devote full-time effort to supervising the business. The manager must also sign agreements including a Guaranty and Assumption of Obligations, a Confidentiality Agreement, and a Non-Compete Agreement. The franchised business must also remain in the top 25% of the system in terms of Annual Revenue Per Capita Growth or a similar metric established by City Wide. These requirements highlight the importance of selecting a manager who is both qualified and willing to commit to City Wide's standards.
Overall, while the franchisee may nominate a manager, City Wide has the power to approve, and potentially withdraw approval, based on various factors including the franchisee's compliance with the agreement and the manager's performance. This underscores the need for open communication and alignment between the franchisee, the manager, and City Wide to ensure the continued success and compliance of the franchised business.