factual

Does the Successor Addendum specify any obligations for the Franchisee related to City Wide?

City_Wide Franchise · 2025 FDD

Answer from 2025 FDD Document

expire, CITY WIDE will inspect the Franchised Business and equipment and notify Franchisee of all required maintenance, refurbishing, renovating, remodeling, and equipment upgrades; Franchisee agrees to complete at Franchisee's expense and to the satisfaction of CITY WIDE, all such maintenance, refurbishing, renovating, remodeling and equipment upgrades no later than thirty (30) days after the respective Term expires.

  • 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.
  • 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.

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 obligations for franchisees. To renew their franchise agreement, franchisees must not be in default of any existing agreements with City Wide or its affiliates and must have substantially complied with all terms and conditions of those agreements throughout their term. This includes meeting the then-current Annual Revenue Per Capita Growth requirement. The franchisee's operation of the franchised business and any other franchise agreements they hold must fully comply with City Wide's standards and the operating manual. All monetary obligations to City Wide and its affiliates must be satisfied in a timely manner.

As part of the renewal process, franchisees must execute the current form of the franchise agreement, including the Successor Addendum. This new agreement supersedes the original and may contain different terms, such as potentially higher royalty and marketing fees. Franchisees are also required to pay a Successor Fee, which is 50% of the then-current Initial Franchise Fee, instead of paying a new full Initial Franchise Fee. Furthermore, franchisees must meet City Wide's current criteria for operating a franchised business, including qualification and training requirements.

In addition to the above, franchisees must execute a general release, releasing any claims against City Wide and related parties. They must also provide satisfactory evidence that they have the right to remain in possession of their office location for the term of the Successor Franchise Agreement, or secure a mutually acceptable alternative location. If a franchisee chooses not to enter into a Successor Franchise Agreement or fails to sign it before the expiration of the current term, they are obligated to sell their rights to the designated territory to City Wide or a City Wide-approved third party. City Wide retains the right of first refusal in such sales.

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.