Is the term 'Franchisee' specifically defined in relation to City Wide in this section?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
SECTION 25. Franchisee Defined and Guaranty
As used in this Agreement, the terms "Franchisee" and "Franchisee's" will include all persons who succeed to the interest of the original Franchisee by transfer or operation of law. If Franchisee is a legal entity, then at least one natural person will have at least a majority ownership interest in Franchisee. By their signatures to this Agreement, all partners, shareholders, officers, and directors of the entity that sign this Agreement as Franchisee acknowledge and accept the duties and obligations imposed upon each of them, individually, by the terms of this Agreement. The singular usage includes the plural, and the masculine usage includes the feminine. All partners, shareholders, officers, and directors of the entity executing the Franchise Agreement are required to execute the Guaranty and Assumption of Obligations which is attached to this Franchise Agreement as Attachment A-1. Additionally, spouses or domestic partners of principals, owners or stockholders will be required to provide a conditional guaranty of payment in the form attached to this Agreement as Attachment A-2.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, the term 'Franchisee' is specifically defined within Section 25 of Item 22, which pertains to contracts. The definition extends beyond the original franchisee to include anyone who inherits the franchisee's interest through transfer or by law. This means that if the franchise changes ownership, the new owner also assumes the responsibilities and rights of the 'Franchisee' as outlined in the agreement.
Furthermore, if the franchisee is a legal entity like a corporation or LLC, the definition stipulates that at least one individual must hold a majority ownership stake. This ensures that there is a responsible individual with controlling interest. All partners, shareholders, officers, and directors are required to acknowledge and accept their individual duties and obligations under the agreement by signing it.
In addition to the primary agreement, these individuals must also execute a Guaranty and Assumption of Obligations, detailed in Attachment A-1 of the Franchise Agreement. Spouses or domestic partners of the principals, owners, or stockholders may also be required to provide a conditional guaranty of payment, as outlined in Attachment A-2. This comprehensive definition aims to clarify the responsibilities and liabilities of all parties involved in the franchise, ensuring that City Wide has recourse to both the entity and the individuals behind it.