factual

After termination of the City Wide Franchise Agreement, what is the geographic radius around other City Wide businesses where competition is restricted?

City_Wide Franchise · 2025 FDD

Answer from 2025 FDD Document

Accordingly, Franchisee covenants that, except as otherwise approved in writing by CITY WIDE, Franchisee will not, for a period of two (2) years after the expiration or termination of this Agreement, regardless of the cause of termination, either directly or indirectly, for himself, or through, on behalf of, or in conjunction with any person, persons, partnership, or corporation, own, maintain, engage in, consult with or have any interest in any business specializing, in whole or in part, in providing the same or similar services or products or activities of any type or nature, targeted at a market of a type the same as or similar to the type of programs offered or provided or markets targeted in or by the System:

  • a.

Within a radius of 150 miles of Franchisee's Franchised Business Location.

  • b.

Within the metropolitan statistical area where Franchisee's Franchised Business is located; or

  • c.

Within a radius of 150 miles of the Location of any other business using the System, whether franchised or owned by CITY WIDE.

Each of the foregoing covenants will be construed as independent of any other covenant or provision of this Agreement.

If all or any portion of a covenant in this Non-Compete Agreement is held unreasonable or unenforceable by a court or agency having valid jurisdiction in an unappealed final decision to which CITY WIDE is a party, Franchisee will be bound by any lesser covenant subsumed within the terms of such covenant that imposes the maximum duty permitted by law, as if the resulting covenant were separately stated in and made a part of this Non-Compete Agreement.

Franchisee understands and acknowledges that CITY WIDE will have the right, in its sole and absolute discretion, to reduce the scope of any covenant set forth in Paragraphs 3 and 4 in this Non-Compete Agreement, or any portion thereof, without Franchisee's consent, effective immediately upon receipt by Franchisee of written notice thereof, and Franchisee will comply forthwith with any covenant as so modified, which will be fully enforceable notwithstanding any contrary provisions of the Franchise Agreement, if any.

CITY WIDE will have the right to require Franchisee to enter into similar covenants with all of Franchisee's personnel performing managerial or supervisory functions and all personnel receiving training relating to the CITY WIDE System, in a form satisfactory to CITY WIDE.

Franchisee acknowledges, covenants and agrees that CITY WIDE will be entitled to immediate equitable remedies, including but not limited to, restraining orders in order to safeguard such proprietary, confidential, unique and special information of CITY WIDE and that money damages alone would be an insufficient remedy with which to compensate CITY WIDE for any breach of the terms of this Non-Compete Agreement.

Nothing herein shall, however, be construed as prohibiting CITY WIDE from pursuing any other remedies available to CITY WIDE for such breach or threatened breach, including recovery of damages from the franchisee.

Source: Item 22 — CONTRACTS (FDD page 65)

What This Means (2025 FDD)

According to City Wide's 2025 Franchise Disclosure Document, franchisees are restricted from competing within a specific geographic area after the termination of their Franchise Agreement. This non-compete agreement lasts for two years, regardless of the reason for termination.

The restricted area includes three possibilities: within 150 miles of the franchisee's former City Wide location; within the metropolitan statistical area where the franchise was located; or within 150 miles of any other business using the City Wide system, whether franchised or owned by City Wide. These restrictions prevent a former franchisee from leveraging City Wide's confidential information and training to unfairly compete with existing City Wide businesses.

These covenants are considered independent, and City Wide has the right to reduce the scope of these restrictions. The FDD also states that City Wide can seek equitable remedies, such as restraining orders, to protect its confidential information and enforce the non-compete agreement, as monetary damages may not be sufficient to compensate for a breach.

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.