factual

Does the Successor Addendum outline any financial thresholds related to City Wide?

City_Wide Franchise · 2025 FDD

Answer from 2025 FDD Document

ness 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.
  • 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.

If Franchisee elects not to enter into a Successor Franchise Agreement for any reason or fails to sign the Successor Franchise Agreement before the expiration of the Term, then Franchisee must sell Franchisee's rights to the Designated Territory to CITY WIDE, or a third party buyer approved by CITY WIDE, in accordance with the requirements outlined in the Operating Manual, and such sale must close before the expiration of the Term.

Source: Item 22 — CONTRACTS (FDD page 65)

What This Means (2025 FDD)

According to City Wide's 2025 Franchise Disclosure Document, the Successor Addendum outlines specific financial obligations and performance criteria that franchisees must meet to qualify for renewal. To renew their franchise agreement, City Wide franchisees must satisfy several monetary obligations, including paying all outstanding debts to City Wide and its affiliates, and consistently meeting these obligations throughout the term. Additionally, franchisees must pay a Successor Fee equal to fifty percent (50%) of the then-current Initial Franchise Fee at the time of executing the Successor Franchise Agreement.

Furthermore, City Wide requires franchisees to meet an Annual Revenue Per Capita Growth target to retain their designated territory. Specifically, franchisees must grow their gross revenues by at least $0.20 per person per year, measured as a three-year rolling average. Failure to meet this growth target can result in City Wide reducing the franchisee's territory size, granting additional franchises within the territory, or even terminating the agreement, although a one-year cure period is provided.

In addition to these financial and performance metrics, franchisees must also comply with City Wide's operational standards and training requirements. They must also execute a general release, releasing any claims against City Wide and its related parties. These conditions collectively ensure that franchisees are in good standing and meet City Wide's standards for renewal.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.