Under what conditions will City Wide engage in collections activities for a franchisee?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee is late in making any two payments of any Royalty Fee or Marketing Fee or any other fees due under this Agreement, CITY WIDE may, at its option, require Franchisee to make all subsequent payments of Royalty Fees and Marketing Fees and any other fees using a direct deposit, bank draft, automatic electronic transfer or wire transfer or other similar means of payment.
Based on this Agreement and any other documentation that CITY WIDE may, at its sole and absolute right, require Franchisee to sign in advance, CITY WIDE will be authorized without any further grant of authority from Franchisee, to send a bank wire deducting the amount of such fees from Franchisee's bank account and deposit such Fees in CITY WIDE's bank account.
In the case of such bank transfers, CITY WIDE is entitled to recover from Franchisee CITY WIDE's costs in sending the bank draft, wire, or electronic transfer fee.
If the bank draft, wire or electronic transfer is returned for insufficient funds, CITY WIDE may charge Franchisee a service charge of ten percent (10%) of the bank draft or wire in addition to any transfer fees and costs incurred.
- 3.12 Verification.
CITY WIDE has the right to establish reasonable procedures for verifying figures and collecting Royalty Fees, Marketing Fees, and all other recurring fees.
- 3.13 Order for Application of Fees.
CITY WIDE will apply for Franchisee's payments under this Section 3 to Franchisee's obligations to CITY WIDE in such order as CITY WIDE may designate from time to time.
Franchisee agrees that Franchisee may not designate an order for application of any fees different from that which CITY WIDE designates.
Franchisee expressly acknowledges and agrees that CITY WIDE may accept fees Franchisee pays under different instructions without any obligation to follow such instructions, even if Franchisee makes such payment conditional on CITY WIDE following such instructions.
This provision may be waived only by a written agreement signed by CITY WIDE, which written agreement must be separate and distinct from the check or other document constituting payment.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to the 2025 City Wide Franchise Disclosure Document, City Wide has the right to establish reasonable procedures for verifying figures and collecting Royalty Fees, Marketing Fees, and all other recurring fees. If a franchisee is late on two payments for Royalty Fees, Marketing Fees, or any other fees, City Wide can require the franchisee to make all subsequent payments via direct deposit, bank draft, automatic electronic transfer, wire transfer, or similar payment method.
City Wide is authorized to send a bank wire deducting the amount of such fees from the franchisee's bank account and deposit such fees in City Wide's bank account based on the franchise agreement and any other documentation that City Wide may require the franchisee to sign. In the case of such bank transfers, City Wide can recover its costs in sending the bank draft, wire, or electronic transfer fee from the franchisee.
If a bank draft, wire, or electronic transfer is returned due to insufficient funds, City Wide may charge the franchisee a service charge of 10% of the bank draft or wire, in addition to any transfer fees and costs incurred. City Wide will apply the franchisee's payments to their obligations to City Wide in such order as City Wide may designate from time to time, and the franchisee cannot designate a different order for the application of fees unless agreed to in writing by City Wide.