Under what conditions can the City Wide Franchise Agreement be modified?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| transferee acceptable to CITY WIDE, subject to compliance with the transfer restrictions above; provided, however, that the Survivor will, throughout such period, fulfill all duties of Franchisee under this Agreement. The 6 months will be extended by up to 60 days to account for CITY WIDE's right of first refusal under described above. Failure to so dispose of the interest within such time will constitute a material breach of the Franchise Agreement. | ||
| q. Non-competition covenants during the term of the franchise | Section 12; Attachment F | You cannot be involved in a competing business. |
| r. Non-competition covenants after the franchise is terminated or expires | Section 12; Attachment F | You cannot be involved in a competing business in your Designated Territory for 2 years after the Franchise Agreement terminates or expires, within the Standard Metropolitan Statistical Area (SMSA) where the Franchised Business Location is located, or within 150 miles of any other CITY WIDE location, whether franchised or operated by CITY WIDE or one of its franchisees or affiliates. |
| S. Modification of the agreement | Section 22 | The Franchise Agreement cannot be modified unless both parties have signed the modifications in writing, but Operating Manual may be changed by CITY WIDE. However, if, at any time during the Term, 60% or more of the franchisees then operating within the CITY WIDE System provide their written consent to a written request by CITY WIDE to modify a provision in the Franchise Agreement, you are deemed to have provided your assent to such a modification to the Franchise Agreement. |
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, the Franchise Agreement can only be modified under specific conditions. Generally, any modification requires a written agreement signed by both City Wide and the franchisee. This ensures that both parties are in accord with the changes and that there is a documented record of the modification. This is a fairly standard clause in franchise agreements, intended to prevent disputes based on verbal agreements or misunderstandings.
However, there is an exception to this rule. If City Wide seeks to modify a provision in the Franchise Agreement and obtains written consent from 60% or more of the franchisees operating within the City Wide system, then all franchisees, including those who did not individually consent, are deemed to have assented to the modification. This allows City Wide to implement changes across the franchise system if a majority of franchisees agree, ensuring a level of uniformity and adaptability within the network.
It is important to note that while the Franchise Agreement itself requires these specific conditions for modification, the Operating Manual can be changed unilaterally by City Wide. Franchisees should therefore pay close attention to the distinction between the Franchise Agreement and the Operating Manual, as changes to the latter can be implemented more easily by City Wide. This is a common practice in franchising, where the operating manual is intended to be a more flexible document that can be updated to reflect changes in the business environment or best practices.