What was the change in software subscription for City Wide in 2023?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | Phone: 864-327-1751 | | | Nick MacKinnon nmackinnon@gocitywide.com | | Iowa | Complete Solutions Iowa, LLC | | | 4434 114th Street | | | Urbandale, IA 50322 | | | Phone: 515-329-1499 | | | Edge Hill Group | | | Jason Cooper | | | jcooper@gocitywide.com | | | Troy Wayman | | | twayman@gocitywide.com | | Idaho | Cross Fox, LLC | | | 1206 N. Galleria Drive | | | Nampa, ID 83687 | | | Phone: 208-546-0982 | | | Bob Bennett bbennett@gocitywide.com |
| Class A | Class B | Capital | Earnings | Income (Loss) | Total | |
|---|---|---|---|---|---|---|
| Balance January 1, 2022 | $ 2,100 | $ 210,000 | $ 366,366 | $ 15,459,388 | $ (5,506) | $ 1 6,032,348 |
| Net income | - | - | - | 10,941,550 | - | 1 0,941,550 |
| Other comprehensive income | - | - | - | - | 26,999 | 26,999 |
| Distributions | - | - | - | ( 8,431,640) | - | (8,431,640) |
| Balance December 31, 2022 | 2,100 | 210,000 | 366,366 | 17,969,298 | 21,493 | 1 8,569,257 |
| Net income | - | - | - | 14,196,288 | - | 1 4,196,288 |
| Other comprehensive loss | - | - | - | - | (6,653) | (6,653) |
| Distributions | ||||||
| - | - | - | ( 21,712,635) | - | (21,712,635) | |
| Balance December 31, 2023 | ||||||
| 2,100 | 210,000 | 366,366 | 10,452,951 | 14,840 | 1 1,046,257 | |
| Net income | ||||||
| - | - | - | 19,161,078 | - | 1 9,161,078 | |
| Other comprehensive income | ||||||
| - | - | - | - | 39,507 | 39,507 | |
| Distributions | ||||||
| - | - | - | ( 16,582,517) | - | (16,582,517) | |
| Balance December 31, 2024 | $ 2,100 | $ 210,000 2024 | $ 366,366 2023 | $ 13,031,512 2022 | $ 54,347 | $ 1 3,664,325 |
| Operating Activities | ||||||
| Net income | $ 19,161,078 | $ 14,196,288 | $ 10,941,550 | |||
| Items not requiring (providing) cash | ||||||
| Depreciation | 999,912 | 1,063,068 | 1,095,919 | |||
| Bad debt expense | 160,526 | 54,103 | 13,153 | |||
| Noncash operating lease cost | 94,315 | 91,359 | 88,451 | |||
| Loss on abandonment of software subscription | 1,454,554 | - | - | |||
| Effect of foreign currency translation (gain) loss | 39,507 | (6,653) | 26,999 | |||
| Deferred compensation | 455,292 | 614,155 | - | |||
| Changes in | ||||||
| Accounts receivable | (838,659) | (645,018) | (691,842) | |||
| Deferred franchise costs and prepaid expenses | (319,698) | 46,486 | (241,676) | |||
| Inventory | 58,725 | (75) | (8,355) | |||
| Software subscription | (631,500) | (891,054) | - | |||
| Accounts payable | 3,969,091 | 2,603,540 | 3,211,061 | |||
| Accrued expenses | 920,639 | 113,353 | 363,757 | |||
| Operating lease liabilities | (182,963) | (180,007) | (177,099) | |||
| Deferred franchise revenue and other deferred income | 503,293 | 555,702 | 1,223,390 | |||
| Deferred compensation | (340,500) | (144,863) | 119,200 | |||
| Refundable advance | (1,618,485) | 2,041,208 | - | |||
| Net cash provided by operating activities | 23,885,127 | 19,511,592 | 15,964,508 | |||
| Investing Activities | ||||||
| Purchase of property and equipment | (311,516) | - | - | |||
| Increase in cash value of life insurance | (599,375) | (349,479) | (108,180) | |||
| Issuance of notes receivable - franchisees | - | - | (1,070,908) | |||
| Issuance of notes receivable - stockholder | (269,911) | (753,141) | - | |||
| Payments received on notes receivable | 315,490 | 599,904 | 1,707,937 | |||
| Net cash provided by (used in) investing activities | (865,312) | (502,716) | 528,849 | |||
| Financing Activities | ||||||
| Distributions to stockholders | (16,582,517) | (21,339,239) | (8,431,640) | |||
| Net cash used in financing activities | (16,582,517) | (21,339,239) | (8,431,640) | |||
| Increase (Decrease) in Cash and Cash Equivalents | 6,437,298 | (2,330,363) | 8,061,717 | |||
| Cash and Cash Equivalents, Beginning of Year | 17,836,030 | 20,166,393 | 12,104,676 | |||
| Cash and Cash Equivalents, End of Year | $ 24,273,328 | $ 17,836,030 | $ 20,166,393 | |||
| Supplemental Cash Flows Information | ||||||
| Property and equipment, net in accounts payable | $ 60,733 | $ - | $ - | |||
| Software subscription in accounts payable | - | 631,500 | - | |||
| Dividends applied to notes receivable | - | 373,396 | - | |||
| Massachusetts | Top Shelf Building Maintenance, Inc 120 N. Main Street, Suite 203 Attleboro, MA 02703 Phone: 401-217-6761 Matt Sacher msacher@gocitywide.com Bay State Property Services, Inc. |
Source: Item 23 — RECEIPT (FDD pages 65–271)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, the software subscription saw a decrease of $891,054 in 2023. This figure is part of the broader cash flow statement, reflecting changes in assets and liabilities that impact City Wide's cash position. This decrease in software subscription impacts the net cash provided by operating activities.
For a prospective franchisee, this indicates a significant adjustment in City Wide's investment in software. It could mean the company either reduced its reliance on certain software, negotiated better subscription terms, or switched to a more cost-effective solution. Understanding the reasons behind this change is crucial, as it could affect the technology and operational tools available to franchisees.
Franchisees should inquire about the specifics of this change. Understanding the nature of the software affected and the reasons for the decrease can provide valuable insights into City Wide's operational strategies and cost management practices. It is also important to understand if this change had any impact on the services provided to the franchisees.
Overall, while a decrease in software subscription expenses might seem positive, franchisees need to assess whether it impacts the quality and efficiency of the services and support they receive. This due diligence will help them make an informed decision about investing in a City Wide franchise.