Under what circumstances, other than the expiration of the initial term, can the City Wide franchise agreement be terminated?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
.2.11 If Franchisee makes an unauthorized assignment of the Franchised Business, its assets or ownership of Franchisee; or
- 14.2.12 If Franchisee fails to comply with the Annual Revenue Per Capita Growth requirement as set forth in Section 6.5 of this Agreement; or
- 14.2.13 If Franchisee fails to comply with the Revenue and Profit Maximization requirements set forth in Section 7.15 of this Agreement; or
- 14.2.14 If Franchisee fails to comply with the Minimum Total Revenue Retention Requirement as set forth in Section 7.19; or
- 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.
- 14.4 Immediate Termination of Rights; Surviving Provisions. Upon the occurrence of any event of default enumerated in Sections 14.1 or 14.2 of this Agreement, or upon termination pursuant to Section 14.5 of this Agreement, and upon Franchisee's failure to cure such default within the applicable period for cure, if any, then subject to the expiration of any minimum time period provided for by applicable law, this Agreement and all Franchisee's rights under it will immediately terminate without further notice or action by CITY WIDE; provided; however, that the rights, duties, covenants, and obligations of the parties to this Agreement will survive the end of the Term of this Agreement only insofar as they set out obligations or duties owed by Franchisee to CITY WIDE ("Surviving Provisions"). Such Surviving Provisions include, but are not limited to, those relating to the use and protection of the Marks (Section 5), the confidentiality and use of the Confidential Information (Section 9), the maintenance of statements and records and inspection and auditing of records (Section 11), covenants relating to non-competition and other Franchisee covenants (Section 12), the post-termination obligations of Franchisee (Section 15), indemnification and independent contractor status (Section 19), the availability of equitable relief and payment of costs and
expenses (Section 23), governing law and dispute resolution (Sections 27 & 29), severability and construction (Section 28), and acknowledgments (Section 30). All obligations of the parties which expressly or by their nature survive the expiration or termination of this Agreement will continue in full force and effect notwithstanding its expiration or termination until they are satisfied or by their nature expire.
- 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. Franchisee waives and releases CITY WIDE from all claims in connection with or arising from such entering and removal. At CITY WIDE's request following an event of default, Franchisee will assemble and make available to CITY WIDE all products and goods in which CITY WIDE has been granted a security interest, at a place to be designated by CITY WIDE which is convenient to both parties.
- 14.6 No Waiver. All acts of CITY WIDE undertaken in the course of efforts to resolve a termination dispute, or a dispute for which termination is a possible remedy, will be deemed to have been undertaken without prejudice to the rights asserted by CITY WIDE and will not constitute a waiver or relinquishment of those rights. In the event Franchisee continues to engage in the Franchised Business while the dispute is pending, that fact, and/or the receipt of monthly payments and the furnishing by CITY WIDE of information and services essential to such operation, will not constitute a waiver or relinquishment of CITY WIDE's rights. CITY WIDE may, at its option and without waiving its right to terminate, seek any form of relief or remedy available to it under common law or statute for any breach of this Agreement, including, but not limited to, the right to damages, injunctive relief, and declaratory orders for specific performance.
- 14.7 Applicable Law.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, the franchise agreement can be terminated under several circumstances besides the expiration of the initial term. City Wide can terminate the agreement if the franchisee breaches any covenant, agreement, obligation, term, warranty, condition, or certification within the agreement. Additionally, if the franchisee defaults on any agreement that is material to the franchised business, or any other franchise agreement, development agreement, or contract between City Wide (or its affiliates) and the franchisee (or an affiliated company), and fails to correct the default within the specified time, it will be considered a default under the franchise agreement.
City Wide can also terminate the agreement immediately if the franchisee knowingly maintains false books or records, makes a materially false statement or report to City Wide, or if City Wide determines that the franchisee or their designee has not satisfactorily completed the mandatory training. Furthermore, City Wide can terminate the agreement if the franchisee commits two or more acts of default within a 12-month period (with an exception for defaults related to annual revenue per capita growth), fails to operate and equip the franchised business as required, or is a party to another franchise agreement with City Wide that City Wide has terminated (unless the termination is solely due to failure to meet growth requirements).
City Wide can also terminate the agreement if the franchisee fails to operate the franchised business during normal business hours for seven or more days without prior written consent from City Wide, or under any circumstance that would lead a reasonable person to believe the franchisee has permanently abandoned the business. In cases of default, City Wide must provide written notification outlining the nature of the default, and the franchisee has a period to correct the default to City Wide's satisfaction. Failure to do so can result in immediate termination of the agreement and all rights granted within it, subject to any minimum time periods required by applicable law.