Under the City Wide Spousal Guaranty, can City Wide transfer the Franchise Agreement to another entity?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
SECTION 7. Continuing Guaranty: Transfer of Franchise Agreement. This Guaranty is a continuing guaranty and will (i) remain in full force and effect until payment in full of the Obligations and all other amounts payable under this Guaranty, (ii) be binding upon the Guarantors, their successors and assigns, and (iii) inure to the benefit of and be enforceable by CITY WIDE and its successors, transferees and assigns. Without limiting the generality of the foregoing clause (iii), CITY WIDE may assign or otherwise transfer the Franchise Agreement to any other person or entity, and such other person or entity shall thereupon become vested with all the rights in respect thereof granted to CITY WIDE herein or otherwise.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, City Wide has the right to transfer the Franchise Agreement to another entity. The Spousal Guaranty agreement specifies that City Wide may assign or transfer the Franchise Agreement to another person or entity. This other entity then assumes all rights previously granted to City Wide under the agreement. This clause ensures that City Wide retains flexibility in its business operations and potential restructuring.
For a prospective franchisee, this means that the agreement they initially sign with City Wide could be transferred to a different company during the term of the franchise. While the terms of the agreement should remain the same, the franchisee would be dealing with a new entity as the franchisor.
This transfer provision is a standard practice in franchising, allowing the franchisor to sell the franchise system or merge with another company. However, franchisees should be aware of this possibility and consider the potential impact of dealing with a new franchisor, even if the agreement terms remain unchanged.