Does the Successor Addendum define the term 'Franchise Agreement' in relation to City Wide?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
ons 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).
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, the Successor Addendum does not explicitly define the term 'Franchise Agreement.' However, it does refer to a 'Successor Franchise Agreement.' According to section 2.2.9, the franchisee must execute the form of franchise agreement being used by City Wide at the time of renewal, including the Successor Addendum, which is collectively referred to as the 'Successor Franchise Agreement'.
This Successor Franchise Agreement will supersede the original agreement, and its terms may differ, potentially including higher royalty and marketing fees. Franchisees must also pay a Successor Fee equal to 50% of the then-current Initial Franchise Fee when executing the Successor Franchise Agreement. Capitalized terms not defined in the Successor Addendum will have the same meaning as in the Successor Franchise Agreement.
While the Successor Addendum modifies specific sections of the Successor Franchise Agreement, it does not provide an overarching definition of 'Franchise Agreement' itself. Instead, it focuses on the terms and conditions applicable to the successor term and how they relate to the existing agreement. Franchisees should carefully review the Successor Franchise Agreement and Successor Addendum to understand their rights and obligations during the renewal term.