factual

Is there a specific definition of 'default' provided in the City Wide franchise agreement?

City_Wide Franchise · 2025 FDD

Answer from 2025 FDD Document

[Item 22: CONTRACTS]

  • 14.1.5 If Franchisee knowingly maintains false books or records or make or have made any materially false statement or report to CITY WIDE in connection with this Agreement or Franchisee's application for this Franchise; or

  • 14.1.6 If CITY WIDE, at its sole and absolute right, determines that Franchisee or any person Franchisee designates for mandatory training pursuant to Section 4.1 of this Agreement has not satisfactorily completed the training or been approved by CITY WIDE after a face-to-face interview and evaluation; or

  • 14.1.7 If Franchisee commits two or more acts of default under this Agreement within any twelve (12) month period, regardless of whether such defaults are cured or waived; provided, however, that a default under Section 6.5 ("Annual Revenue Per Capita Growth") will not be counted for purposes of applying this subsection; or

  • 14.1.8 If Franchisee fails to operate and equip the Franchised Business as provided in Sections 6 and 7 of this Agreement; or

  • 14.1.9 If Franchisee is a party to any other franchise agreement with CITY WIDE which agreement CITY WIDE has terminated in accordance with the terms and conditions of such other

franchise agreement (unless such termination is based solely on Franchisee's failure to meet the Annual Revenue Per Capita Growth requirements or similar growth requirements); or

  • 14.1.10 If Franchisee fails to operate the Franchised Business during normal business hours for a period of seven (7) days or more without the prior written consent of CITY WIDE or any other circumstance which would lead a reasonable person to believe that Franchisee has permanently left the Franchised Business, and CITY WIDE will declare that Franchisee have abandoned the business for purposes of this Agreement.

  • 14.2 Termination After Failure to Cure.

Franchisee will be deemed to be in default under this Agreement and CITY WIDE may elect to terminate this Agreement and all rights granted under this Agreement if within thirty (30) days after CITY WIDE sends Franchisee written notification setting out the nature of the default ("Notice to Cure"), or within any such period set forth in this Agreement or permissible by law, Franchisee does not correct the default to CITY WIDE's satisfaction: [Item 22: CONTRACTS]

  • 14.5 Rights of a Secured Party.

Upon the occurrence of any event of default enumerated in Section 14.1 or 14.2 above, in addition to any other rights and remedies to which it may be entitled, CITY WIDE will have all rights and remedies of a secured party under the UCC as enacted in the State of Kansas, including but not limited to, the right to enter any premises of Franchisee to remove and repossess any products and goods in which CITY WIDE has been granted a security interest, without notice to Franchisee.

  • 14.2.15 If Franchisee breaches any other covenant, agreement, obligation, term, warranty, condition, or certification contained in this Agreement.

  • 14.3 Breach of Related Agreement.

If Franchisee defaults under any term of any agreement material to the Franchised Business or any other Franchise Agreement, Development Agreement or other contract or agreement between CITY WIDE or its affiliates, on the one hand, and Franchisee or a Franchisee Affiliated Company, on the other hand, and such default is not cured within the time specified in such agreement, contract or other franchise agreement, such default shall be deemed a default under this Agreement.

Source: Item 22 — CONTRACTS (FDD page 65)

What This Means (2025 FDD)

According to City Wide's 2025 Franchise Disclosure Document, several conditions can lead to a franchisee being considered in default of their franchise agreement. These include knowingly maintaining false records or making false statements to City Wide, or not satisfactorily completing mandatory training. Committing two or more defaults within a 12-month period also constitutes a default, although failures related to the Annual Revenue Per Capita Growth are excluded from this calculation.

Other default triggers include failing to properly operate or equip the franchised business, defaulting on any other City Wide franchise agreement, or ceasing operations for seven or more days without written consent. Furthermore, breaching any term within the franchise agreement or defaulting on any agreement with City Wide or its affiliates also constitutes a default.

City Wide outlines a procedure for addressing defaults, including sending a "Notice to Cure" that allows the franchisee a period, typically 30 days, to correct the default. If the franchisee fails to remedy the default to City Wide's satisfaction within the given timeframe, City Wide has the right to terminate the agreement. Upon default, City Wide has rights and remedies under the Uniform Commercial Code (UCC), including the right to enter the franchisee's premises and repossess products and goods where City Wide holds a security interest.

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.