What is the consequence of not meeting the Annual Revenue Per Capita Growth for City Wide?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
Term or any Successor Term as outlined in the Manual. Franchisee shall not change the Location without CITY WIDE's approval. Franchisee shall give CITY WIDE at least thirty (30) days prior written notice of any such change and CITY WIDE shall have thirty (30) days within which to approve such Location and the proposed décor and signage. If CITY WIDE does not disapprove of such Location, décor or signage within such thirty (30) day period, same shall be deemed disapproved.
- 6.5 To retain rights to the Designated Territory, Franchisee must meet the annual revenue per capita growth ("Annual Revenue Per Capita Growth") in every year in the Term of the Agreement, as published on uscensus.gov. Specifically, Franchisee will be required to grow the gross revenues generated by the Franchised Business to no less than $0.20 per person per year. Franchisees must meet this requirement each year; however, CITY WIDE will measure this requirement using a three-year rolling average. CITY WIDE will measure Franchisee's Annual Revenue Per Capita Growth by calculating the average revenues generated by Franchisee's Franchised Business in the preceding two (2) years of operations. Each year thereafter, CITY WIDE will measure Franchisee's Annual Revenue Per Capita Growth by calculating the average revenues generated by Franchisee's Franchised Business in the immediately preceding two (2) years of operations. Each year thereafter, CITY WIDE will measure Franchisee's Annual Revenue Per Capita Growth by calculating the average revenues generated by Franchisee's Franchised Business in the immediately prec
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, franchisees must meet an Annual Revenue Per Capita Growth target to retain their designated territory rights. This growth is measured annually using a three-year rolling average, requiring franchisees to increase gross revenues by at least $0.20 per person per year, based on data from uscensus.gov. This metric may be adjusted annually based on the Consumer Price Index, with a maximum increase of 3%, and City Wide will notify franchisees of any such adjustments in the manual.
If a City Wide franchisee fails to meet the Annual Revenue Per Capita Growth requirement, it is considered a material breach of the Franchise Agreement. In such cases, City Wide has the right to take several actions. These include reducing the size of the franchisee's designated territory, granting additional franchises within that territory, or even terminating the Franchise Agreement altogether.
However, City Wide provides a one-year period for the franchisee to correct this breach. This cure period allows the franchisee time to improve their business performance and meet the required growth target. It is important to note that failure to meet the Annual Revenue Per Capita Growth is specifically excluded from being counted as one of the multiple acts of default that could lead to termination within a twelve-month period under Section 14.1.7 of the agreement, offering some protection to franchisees focused on addressing the growth deficiency.