Under what circumstances will City Wide's decisions or actions be considered the result of 'Reasonable Business Judgment'?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
- 24.4 Whenever Franchisor reserves discretion in a particular area or where Franchisor agrees to exercise Franchisor's right reasonably or in good faith, Franchisor will satisfy Franchisor's obligations whenever Franchisor exercises reasonable business judgment ("Reasonable Business Judgment") in making Franchisor's decision or exercising Franchisor's rights. Franchisor's decisions or actions will be deemed to be the result of Reasonable Business Judgment, even if other reasonable or even arguably preferable alternatives are available, if Franchisor's decision or action is intended, in whole or significant part, to promote or benefit the System generally even if the decision or action also promotes Franchisor's financial or other individual interest. Examples of items that will promote or benefit the System, include, without limitation, enhancing the value of the Marks, improving customer service and satisfaction, improving product quality, improving uniformity, enhancing, or encouraging modernization, and improving the competitive position of the System.
- 24.5 No warranty or representation is made by CITY WIDE that all CITY WIDE System franchise agreements heretofore or hereafter issued by CITY WIDE do or will contain terms substantially like to those contained in this Agreement. Further, Franchisee recognizes and agrees that CITY WIDE may, in its Reasonable Business Judgment, due to local business conditions or otherwise, waive or modify comparable provisions of other franchise agreements heretofore or hereafter granted to other CITY WIDE System franchise owners in a non-uniform manner, unless otherwise required by this Agreement or by law.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, City Wide's decisions or actions are considered to be the result of 'Reasonable Business Judgment' when City Wide exercises its rights reasonably or in good faith. Even if other alternatives are available, City Wide's decisions are still considered to be the result of reasonable business judgment if the decision or action is intended to promote or benefit the City Wide system, even if it also benefits City Wide's financial or other individual interests.
Examples of actions that promote or benefit the City Wide system include enhancing the value of City Wide's marks, improving customer service and satisfaction, improving product quality, improving uniformity, enhancing or encouraging modernization, and improving the competitive position of the City Wide system.
City Wide also reserves the right to waive or modify comparable provisions of other franchise agreements in a non-uniform manner due to local business conditions or other factors, as long as it is done in its Reasonable Business Judgment, unless otherwise required by the Franchise Agreement or by law. This means that City Wide has some flexibility in how it applies the franchise agreement to different franchisees, but it must do so reasonably and in good faith.