Is the Successor Addendum conditional upon any specific events related to City Wide?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
2.2.5 Franchisee must not be in default of any provision of this Agreement, any amendment to this Agreement, or any other agreement between CITY WIDE or its respective subsidiaries or affiliates, and at all times Franchisee must have substantially complied with all the terms and conditions of this Agreement and any other agreements between the parties during the respective Terms, including but not limited to then current Annual Revenue Per Capita Growth requirement (See Section 6.5).
2.2.6 Franchisee's operation of the Franchised Business must be in full compliance with the standards, specifications, requirements, instructions set forth in this Agreement and in the Operating Manual of CITY WIDE.
2.2.7 Franchisee's operations under all other Franchise Agreements, if any, must be in full compliance with the standards, specifications, requirements, instructions set forth under all other Franchise Agreements and in the Operating Manual of CITY WIDE.
2.2.8 Franchisee must have satisfied all monetary obligations Franchisee owes to CITY WIDE and its subsidiaries and affiliates and timely met such obligations throughout the respective Term.
2.2.9 Franchisee must execute the form of franchise agreement being used by CITY WIDE at the time Franchisee renews, including the Successor Addendum (See Attachment J) (collectively, "Successor Franchise Agreement"), which Successor Franchise Agreement will in all respects supersede this Agreement and the terms of which may differ from the terms of this Agreement, including, without limitation, a higher percentage Royalty Fee (See Section 3.7.1) and Marketing Fee (See Section 3.7.2(a).
2.2.10 Franchisee must pay CITY WIDE a renewal fee ("Successor Fee") equal to fifty percent (50%) of the then-current Initial Franchise Fee set forth in the Franchise Disclosure Document , at the time Franchisee executes the Successor Franchise Agreement which amount will be instead of payment of a new Initial Franchise Fee.
2.2.11 Franchisees must comply with CITY WIDE's then-current criteria for operating a Franchised Business, including CITY WIDE's then-current franchisee qualification and training requirements.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, the Successor Addendum, which is part of the renewal process, is conditional upon several factors related to the franchisee's performance and relationship with City Wide. Specifically, a franchisee's eligibility to enter into a Successor Term, which allows for two consecutive five-year extensions of the franchise agreement, depends on meeting certain conditions.
These conditions include the original franchise agreement being in full force and effect, and the franchisee providing written notice of their intent to renew at least one year before the current term expires. City Wide will then inspect the franchised business and equipment 90 days before the term expires, notifying the franchisee of any required maintenance or upgrades, which the franchisee must complete at their own expense within 30 days after the term's expiration.
Moreover, the franchisee must not be in default of any agreements with City Wide, must have substantially complied with all agreement terms, and must operate the franchised business in full compliance with City Wide's standards and specifications. The franchisee must also have satisfied all monetary obligations to City Wide and its affiliates. Finally, the franchisee is required to execute the current form of franchise agreement, including the Successor Addendum, and pay a Successor Fee equal to 50% of the then-current Initial Franchise Fee.
In summary, the Successor Addendum and the ability to renew the franchise agreement with City Wide are contingent upon the franchisee's adherence to the agreement's terms, satisfactory performance, and meeting financial obligations, as well as executing the then-current franchise agreement and paying the required renewal fee. This ensures that only franchisees in good standing and who meet City Wide's standards are granted the opportunity to continue operating under the City Wide brand.