In City Wide's consolidated statements of income and comprehensive income, are taxes collected from customers and remitted to governmental authorities presented on a net or gross basis?

According to City Wide's 2025 Franchise Disclosure Document, taxes collected from customers and subsequently remitted to governmental authorities are presented on a gross basis within the company's consolidated statements of income and comprehensive income. This means that the full amount of taxes collected is reported as revenue, and the remittance of these taxes is reported as an expense.

For a prospective City Wide franchisee, this accounting practice provides a more transparent view of the company's total revenue and expenses. Instead of netting the taxes against revenue, which would only show the net amount retained by the company, the gross presentation reflects the total economic activity managed by City Wide, including the collection and remittance of taxes.

This gross presentation aligns with standard accounting practices, offering a clear picture of City Wide's financial operations. Franchisees can gain a better understanding of the total sales volume and the associated tax obligations, which is essential for assessing the financial health and performance of the franchise system.