When is the audit fee due to City Wide?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
4 months | $2,900/mo. | | | 25 and all months thereafter | $3,350/mo. | | | Type of Fee1 | Amount | Due Date | Remarks | |-------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | | you under the franchise | | | | | agreement | | | | | (including the Initial | | | | | Fees). The Transfer Fee is in | | | | | addition to any third-party | | | | | broker fee. No Transfer Fee is | | | | | assessed for a transfer to your | | | | | survivor. | | Audit | Amount of underpayment, plus interest at highest legal rate, not to exceed 10%. If underpayment is 2% or more, you must reimburse CITY WIDE for its audit costs. Audit costs may run as much as $6,000. | Upon billing by CITY WIDE. | Payable only if au
Source: Item 6 — OTHER FEES (FDD pages 16–20)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, an audit fee is due upon billing by City Wide. This fee is only payable if an audit reveals an understatement of at least 2% of Gross Sales for any month.
The audit itself is triggered if City Wide suspects that a franchisee has underreported their Gross Sales. If the audit confirms an underpayment, the franchisee will be responsible for the amount of the underpayment, plus interest at the highest legal rate, but not exceeding 10%.
Furthermore, if the underpayment is 2% or more, the franchisee must also reimburse City Wide for the costs associated with conducting the audit. These audit costs could potentially reach as much as $6,000. This means that franchisees must maintain accurate records and report Gross Sales precisely to avoid potential audit fees, interest charges, and the reimbursement of City Wide's audit expenses.