If a City Publications deck/booklet mailing is canceled, how is the prepaid royalty handled?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee | 6% of Gross Sales for Standard card deck mailings. 3% of Gross Sales for single card mailings and digital advertising | Payable twice each calendar quarter, based on the schedule for each deck mailing | See definition of Gross Sales.2 (Section 1) In case of deck/booklet cancelation, any royalty prepaid for that deck or booklet will be applied to any mailings taking place within the next four months, up to a maximum of two mailings. After four months, the prepaid royalty is non-refundable. |
Source: Item 6 — OTHER FEES (FDD pages 10–13)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, if a deck or booklet mailing is canceled, any royalty prepaid for that mailing will be applied to mailings taking place within the next four months, up to a maximum of two mailings. After four months, the prepaid royalty becomes non-refundable.
This policy has important implications for City Publications franchisees. If a mailing is canceled, the franchisee isn't automatically entitled to a refund of the prepaid royalty. Instead, the franchisee must ensure that at least one or two mailings occur within the subsequent four-month period to utilize the prepaid royalty. This could potentially pressure franchisees to schedule additional mailings even if market conditions aren't ideal, to avoid losing the prepaid amount.
It's important for prospective City Publications franchisees to carefully consider this policy and factor it into their financial planning. They should also inquire about the circumstances under which mailings might be canceled and how frequently cancellations occur. Understanding these factors can help franchisees better manage their cash flow and minimize the risk of losing prepaid royalties.