Under what circumstances will City Wide refund the Initial Fees to a franchisee?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
this Agreement (except Franchisee's continuing Royalty Fee and Marketing Fee contributions, and any other continuing obligation Franchisee owes CITY WIDE during the term of this Agreement, as defined and outlined in this Agreement). CITY WIDE will have the sole and absolute right to determine the sufficiency of all such proof of financing or assets. CITY WIDE will not begin training until Franchisee satisfies this requirement.
- 3.4 Refunds. The Initial Fees will be deemed fully earned upon their payment and are nonrefundable, except as provided below:
- 3.4.1 If CITY WIDE, at its sole and absolute right, after evaluating Franchisee's personal abilities, aptitudes, and financial qualifications to be a franchisee, elects within fifteen (15) days
following the submission of all data to terminate this Agreement, Franchisee shall receive a refund of the Initial Fees, less an evaluation fee which will not exceed Two Thousand Five Hundred Dollars ($2,500).
- 3.4.2 If Franchisee is unable to provide adequate proof of financing or have sufficient assets and in an acceptable form, at CITY WIDE's sole and absolute right, within thirty (30) days of the execution of this Agreement, then upon written notice by either party, CITY WIDE or Franchisee may terminate this Agreement and CITY WILL shall refund the Initial Fees paid to CITY WIDE by Franchisee, less the sum of Two Thousand Five Hundred Dollars ($2,500) in payment for CITY WIDE's expenses incurred on Franchisee's behalf. Franchisee and CITY WIDE agree that this amount is reasonable and due to the nature of the subject matter, it would be impossible to ascertain the exact amount of damages.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, the initial fees, which include the Initial Franchise Fee, Initial Training Fee, Initial Territory Fee, and Technology Provisioning Fee, are generally nonrefundable. However, there are specific circumstances under which a franchisee may receive a refund of the initial fees.
First, if City Wide, at its sole discretion, terminates the agreement within fifteen days of receiving all necessary data from the franchisee after evaluating the franchisee's abilities, aptitudes, and financial qualifications, the franchisee will receive a refund of the Initial Fees, less an evaluation fee that will not exceed $2,500. Second, if the franchisee cannot provide adequate proof of financing or sufficient assets within thirty days of signing the agreement, City Wide may terminate the agreement and refund the Initial Fees, less $2,500 to cover City Wide's expenses.
Third, if the franchisee or their designees do not successfully complete the required initial training program or fail to secure an acceptable site for the Franchised Business's office, as determined by City Wide, City Wide may terminate the agreement and refund the Initial Fees, less training and other expenses, which shall not exceed $10,000. It is important for prospective franchisees to understand these conditions, as the refund of initial fees is contingent upon specific circumstances and is subject to deductions for expenses incurred by City Wide.