Under what conditions can City Wide terminate the Franchise Agreement due to an unapproved transfer?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
Any purported assignment or transfer, by operation of law or otherwise, not having the prior written consent of CITY WIDE will be null and void and will constitute a material breach of this Agreement entitling CITY WIDE, at its sole and absolute right, to immediately terminate this Agreement; provided however, that CITY WIDE will not unreasonably withhold its approval of a Transfer to a proposed transferee who is of good moral character and whose business experience and aptitude, financial resources, and other qualifications meet CITY WIDE's then-current standards, so long as Franchisee is in full compliance with this Agreement at the time of the proposed Transfer.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, City Wide can immediately terminate the Franchise Agreement if a franchisee attempts to transfer the franchise without prior written consent from City Wide. This includes any transfer or assignment by law or any other means.
However, City Wide states that it will not unreasonably withhold approval of a transfer to a proposed transferee if the person is of good moral character, possesses the necessary business experience, aptitude, financial resources, and meets City Wide's current standards. The franchisee must also be in full compliance with the Franchise Agreement at the time of the proposed transfer.
This provision protects City Wide's interests by ensuring that franchise owners meet their standards and obligations. It also allows City Wide to maintain control over who operates a franchise under its brand. For a prospective franchisee, this means understanding the conditions under which a transfer can be approved or denied and ensuring full compliance with the agreement to facilitate any future transfer.