Does the Successor Addendum describe the nature of the relationship between City Wide and the Franchisee?
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).
- 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.
- 2.2.12 Franchisee must execute a general release, in a form CITY WIDE prescribes, releasing any claims against CITY WIDE or its subsidiaries, affiliates, officers, directors, agents, and employees which Franchisee may have or assert at time of renewal; and
- 2.2.13 Franchisee must present evidence satisfactory to CITY WIDE that Franchisee has the right to remain in possession of the Location of the Office (See Item 12) for the Term, or a mutually acceptable alternative Location.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to the 2025 City Wide Franchise Disclosure Document, the Successor Addendum outlines key aspects of the ongoing relationship between City Wide and its franchisees during the renewal term. Specifically, it addresses the franchisee's obligations, the fees they must pay, and the standards they must adhere to. The Successor Addendum modifies or replaces certain sections of the original franchise agreement, such as those pertaining to franchise fees, recurring fees, and training requirements. This ensures that the agreement reflects the current policies and fees at the time of renewal.
For example, the Successor Addendum details the Successor Fee, which is fifty percent of City Wide's current Initial Franchise Fee. It also discusses recurring fees, such as the Royalty Fee, which is the greater of 5% of Gross Sales or a minimum of $5,000 per month. Furthermore, the addendum emphasizes the franchisee's responsibility to maintain all necessary permits and certifications for operating the franchised business.
The Successor Addendum also clarifies that City Wide and the franchisee operate as independent contractors, not as agents, partners, or employees of each other. This distinction is important for liability and operational control. The addendum also states that City Wide does not guarantee specific results, such as a certain number of appointments or sales, highlighting the franchisee's role in driving business performance.
Overall, the Successor Addendum serves to update and clarify the terms of the franchise agreement for the renewal term, ensuring that both City Wide and the franchisee are aligned on their respective rights and responsibilities. Prospective franchisees should carefully review the Successor Addendum to understand the specific changes and obligations that will apply upon renewal.