Under what circumstances does City Wide have a right of first refusal to acquire a City Wide franchised business?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in | Summary |
|---|---|---|
| Franchise Agreement | reasonable attorneys’ fees, incurred by CITY WIDE subsequent to termination or expiration in connection with obtaining injunctive or other relief under the Franchise Agreement; provide all signage to CITY WIDE; and take further action as may be required by the Operating Manual or reasonably requested by CITY WIDE; and, if due to your default, forfeit any royalty rebate. | |
| j. Assignment of contract by | Section 13 | No restriction on CITY WIDE’s right to assign. |
| Franchisor | ||
| k. “Transfer” by you – definition | Section 13 | Includes transfer of contract or assets or change in ownership. |
| l. Franchisor’s approval of transfer | Section 13 | CITY WIDE has the right to approve all transfers, |
| by you | but will not unreasonably withhold approval. | |
| m. Conditions for Franchisor’s approval of transfer | Section 13 | You must ask CITYWIDE at least 60 days before to approve a transfer; you must pay a Transfer Fee equal to $25,000 and pay any applicable third-party broker fee; you must be in compliance with the Franchise Agreement and Operating Manual; transferee must meet CITY WIDE’s standards, agree to make required upgrades, sign the current form of franchise agreement, and pay all required fees (including Initial Fees). |
| n. Franchisor’s right of first refusal to acquire your business | Section 20 | If you propose to sell the Franchised Business, its assets or part of the ownership of Franchisee, CITY WIDE will have a right of first refusal for 60 days to purchase for the price, terms and conditions offered to you (except CITY WIDE may substitute cash for payment terms). |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 44–47)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, City Wide has a right of first refusal if a franchisee proposes to sell their franchised business, its assets, or part of the ownership of the franchise. This means that before a franchisee can sell to a third party, they must first offer City Wide the opportunity to purchase the business on the same terms.
City Wide has 60 days to exercise this right of first refusal, allowing them time to evaluate the offer and decide whether they want to buy the business. The terms and conditions offered to the franchisee by the third party will apply to City Wide, although City Wide has the option to substitute cash for any payment terms outlined in the offer.
This right of first refusal allows City Wide to maintain control over who enters the franchise system and to ensure that existing businesses are transferred in a way that aligns with the company's overall strategy. For a franchisee, this means that selling their business may involve an additional step of offering it to City Wide first, which could potentially delay the sale process.