Does the Successor Addendum outline any specific responsibilities of the 'Franchisee' towards City Wide?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
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. For the avoidance of any confusion, Franchisee acknowledges and agrees that CITY WIDE always maintains its right of first refusal relating to the sale by Franchisee of any rights relating to the Designated Territory, and such right of first refusal does not in any way require CITY WIDE to purchase from Franchisee such rights relating to the Designated Territory.
2.3 Interim Period. If Franchisee does not sign a Successor Franchise Agreement before the expiration of this Agreement and Franchisee continues to accept the benefits of this Agreement after the expiration of this Agreement, then at CITY WIDE's sole and absolute right, this Agreement may be treated either as (i) expired as of the date of expiration with Franchisee then operating without a license to do so and in violation of CITY WIDE's rights; or (ii) continued on a month-to-month basis ("Interim Period") until one party provides the other with written notice of such party's intent to terminate the Interim Period, in which case the Interim Period will terminate thirty (30) days after receipt of the notice to terminate the Interim Period (unless applicable state law requires a longer notice period).
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 several responsibilities of the franchisee. Specifically, the franchisee must adhere to the current operational criteria, including qualification and training standards set by City Wide. The franchisee is also required to execute a general release, absolving City Wide and its affiliates from any claims at the time of renewal. Furthermore, the franchisee needs to provide evidence ensuring their right to remain at the current office location or secure an alternative location acceptable to City Wide for the duration of the term.
If a franchisee chooses not to enter into a Successor Franchise Agreement or fails to sign it before the current term expires, they are obligated to sell their rights to the designated territory back to City Wide or to a third-party buyer approved by City Wide. This sale must be completed before the expiration of the term. City Wide retains the right of first refusal in any sale of territory rights by the franchisee, although this does not obligate City Wide to purchase those rights.
Additionally, the franchisee is responsible for maintaining an office within their designated territory and must obtain and maintain all necessary permits, licenses, and approvals required to operate the franchised business. They must also furnish City Wide with copies of these permits and certifications for approval before executing the agreement. These stipulations ensure that franchisees continue to meet City Wide's standards and legal requirements, protecting the brand and maintaining operational consistency.