When is the Successor Fee for a City Wide franchise due?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to the 2025 City Wide Franchise Disclosure Document, the Successor Fee, which is a renewal fee, is due when the franchisee executes the Successor Franchise Agreement. The Successor Fee is equal to fifty percent (50%) of the then-current Initial Franchise Fee set forth in the Franchise Disclosure Document at the time of renewal. This fee is paid instead of paying a new Initial Franchise Fee.
This means that if a franchisee wants to renew their City Wide franchise agreement, they must sign a new agreement (the Successor Franchise Agreement) and pay the Successor Fee at that time. The amount of the fee is dependent on what the current Initial Franchise Fee is at the time of renewal, not what it was when the franchisee originally signed their agreement.
It is important to note that the terms of the Successor Franchise Agreement may differ from the original agreement, potentially including a higher percentage Royalty Fee and Marketing Fee. The franchisee must also meet certain obligations, including being in good standing with City Wide, operating the Franchised Business in compliance with City Wide's standards, and meeting all monetary obligations.