After termination of the City Wide Franchise Agreement, is there a restriction on operating a competitive business within the metropolitan statistical area where the City Wide franchise was located?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
geted at a retail 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.
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- Franchisee specifically acknowledges that, pursuant to this Agreement, Franchisee will receive valuable training and confidential information, including, without limitation, CITY WIDE's past, present or prospective client list, pricing formulas, policies, bids, quotes, proposals, profitability, margin strategies, presentation strategies and techniques, business plans, training materials, and additional information regarding the promotional, operational, sales and marketing methods and techniques of CITY WIDE and the System. 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.
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- 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.
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- 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.
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- 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.
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- 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.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, a franchisee is restricted from operating a competitive business after the termination of the Franchise Agreement. Specifically, for a period of two years after the expiration or termination of the agreement, the franchisee cannot own, maintain, engage in, consult with, or have any interest in any business specializing in similar services or products targeted at a similar market to the City Wide system. This restriction applies regardless of the cause of termination.
The non-compete agreement specifies that the franchisee is restricted from operating a competitive business within certain geographic areas. These areas include a 150-mile radius of the franchisee's franchised business location, the metropolitan statistical area where the franchised business is located, and a 150-mile radius of any other business using the City Wide system.
City Wide also has the right to reduce the scope of any covenant set forth in the Non-Compete Agreement. Franchisees acknowledge that they will receive valuable training and confidential information, including client lists, pricing formulas, business plans, and marketing methods. To protect this information, City Wide can seek equitable remedies, such as restraining orders, in the event of a breach of the non-compete agreement, as monetary damages alone may not be sufficient to compensate City Wide.