Under Section 7, what obligations does the City Wide Franchisee have?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
14.1.8 If Franchisee fails to operate and equip the Franchised Business as provided in Sections 6 and 7 of this Agreement;
2.2.5 Franchisee must not be in default of any provision of this Agreement, any amendment to this Agreement, or any other agreement between CITY WIDE or its respective subsidiaries or affiliates, and at all times Franchisee must have substantially complied with all the terms and conditions of this Agreement and any other agreements between the parties during the respective Terms, including but not limited to then current Annual Revenue Per Capita Growth requirement (See Section 6.5).
2.2.6 Franchisee's operation of the Franchised Business must be in full compliance with the standards, specifications, requirements, instructions set forth in this Agreement and in the Operating Manual of CITY WIDE.
2.2.8 Franchisee must have satisfied all monetary obligations Franchisee owes to CITY WIDE and its subsidiaries and affiliates and timely met such obligations throughout the respective Term.
2.2.10 Franchisee must pay CITY WIDE a renewal fee ("Successor Fee") equal to fifty percent (50%) of the then-current Initial Franchise Fee set forth in the Franchise Disclosure Document , at the time Franchisee executes the Successor Franchise Agreement which amount will be instead of payment of a new Initial Franchise Fee.
Franchisee will exert its best efforts to protect each Technology System against a cyber event including any claims related to data breach, identify theft or theft of personal information ("Cyber Event").
Franchisee shall reimburse City Wide for all of City Wide's out-of-pocket costs and expenses incurred in responding to and remedying any Cyber Event if such Cyber Event is conclusively determined to have been caused solely by Franchisee or directly related to Franchisee's Franchised Business operations.
Franchisee shall at all times be compliant with applicable laws regarding data privacy, data security and security breaches.
In addition to CITY WIDE's right to terminate this Agreement, and not in lieu of such right or any other rights against Franchisee, if Franchisee has not cured a default under this Agreement within the time allotted by CITY WIDE after receipt of the Notice to Cure from CITY WIDE, CITY WIDE may, at its option, enter the premises of the Franchised Business and exercise complete authority with respect to its operation until such time as CITY WIDE determines that Franchisee's default has been cured and that there is compliance with the requirements of this Agreement.
Franchisee specifically agrees that a Representative (as defined in Section 16) of CITY WIDE may take over, control, and operate the business, and that Franchisee will pay CITY WIDE a service fee of not less than Three Hundred Dollars ($300) per day plus all travel expenses, room and board and other expenses reasonably incurred by such Representative so long as it will be required by the Representative to enforce compliance.
- 14.9 If this Agreement is terminated by the Franchisor due to an uncured breach by Franchisee, Franchisee will forfeit all rights Franchisee may have otherwise had in and to any Royalty Rebate if the Agreement were not terminated.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
Based on the 2025 City Wide Franchise Disclosure Document, Section 7 outlines specific operational obligations for franchisees. While the provided excerpts do not explicitly detail the entirety of Section 7, they do highlight several key duties and responsibilities. Franchisees must operate and equip their franchised business as specified in Sections 6 and 7 of the Franchise Agreement. This includes adhering to standards, specifications, requirements, and instructions outlined in both the agreement and the City Wide Operating Manual.
City Wide franchisees are obligated to protect each Technology System against cyber events, including data breaches and identity theft. If a cyber event occurs that is caused solely by the franchisee, the franchisee is responsible for reimbursing City Wide for all out-of-pocket costs and expenses incurred in responding to and remedying the event. Franchisees must also comply with all applicable laws regarding data privacy, data security, and security breaches, and should seek advice from their own legal and security consultants to ensure full compliance with data security safeguards.
Additionally, franchisees must not be in default of any provision within the Franchise Agreement or any other agreement with City Wide or its affiliates. They must substantially comply with all terms and conditions of these agreements, including meeting the Annual Revenue Per Capita Growth requirement. Franchisees must also satisfy all monetary obligations owed to City Wide and its subsidiaries and affiliates in a timely manner. These obligations extend to renewals, where franchisees must execute the current form of the franchise agreement and pay a renewal fee equal to fifty percent (50%) of the then-current Initial Franchise Fee.
In cases of uncured breaches, City Wide has the right to enter the franchisee's premises and operate the business, charging the franchisee a service fee of not less than $300 per day, plus all associated expenses. Furthermore, franchisees must indemnify and hold harmless City Wide for any acts or omissions during such temporary operation. Upon termination due to an uncured breach, the franchisee forfeits all rights to any Royalty Rebate. Post-termination, franchisees remain obligated to protect City Wide's Marks and Confidential Information, and adhere to non-competition covenants.