What is considered 'Independent Labor Cost' for City Wide franchisees?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
rvices and supplies, prepared from sales records and reports, as generated by CITY WIDE required accounting software, and submitted to CITY WIDE by the CITY WIDE franchisees satisfying the Quartile Reporting Criteria. A franchisee's Monthly Gross Sales is likely to be lower in its first year of business.
- (5) Independent Labor Cost as a Percentage of Total Annual Revenues is calculated by deducting the cost of independent labor ("Independent Labor Cost") incurred on an annual basis from total Annual Revenue where an Independent Contractor, generally under contract, for the performance of such work. Revenue generated by each CITY WIDE franchisee and reported by managers or owners of each of the CITY WIDE franchisees satisfying the Quartile Reporting Criteria. Independent Labor Cost is comprised of all costs and expenses paid by CITY WIDE franchisees that satisfied the Quartile Reporting Criteria to outside vendors who performed services for customers of CITY WIDE franchisees. CITY WIDE does not know of an instance, nor does CITY WIDE have reason to believe, that any manager or owner would overstate or understate his or her Independent Labor Cost in his or her report. However, neither the Annual Revenue associated with Independent Contractors, nor the annual Independent Labor Cost figures have been audited and CITY WIDE has not independently verified these average monthly sales or cost numbers.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 48–58)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, 'Independent Labor Cost' is defined as the cost of independent labor incurred on an annual basis, deducted from total Annual Revenue, where an Independent Contractor, generally under contract, performs such work. This revenue is generated by each City Wide franchisee and reported by the managers or owners of each of the City Wide franchisees satisfying the Quartile Reporting Criteria.
Specifically, Independent Labor Cost includes all costs and expenses paid by City Wide franchisees to outside vendors who perform services for customers of City Wide franchisees. City Wide does not audit or independently verify the Annual Revenue associated with Independent Contractors, nor the annual Independent Labor Cost figures reported by franchisees.
Prospective franchisees should understand that managing independent labor costs is crucial for profitability. The FDD includes tables (Table No. 2(c)(i) and (ii), Table No. 3(c)(i) and (ii), Table No. 4(c)(i) and (ii), and Table No. 5(c)(i) and (ii)) that represent Independent Labor Costs as a percentage of Gross Sales experienced by franchisees relating to the sale of City Wide services during the 2023 and 2024 fiscal years. Reviewing these tables can provide insights into typical labor costs within the City Wide system and how they impact gross margins.