How does City Wide define 'Gross Sales' for a City Wide franchise?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3.5 Definition of Gross Sales.
The term "Gross Sales" shall mean all Franchised Business's revenues invoiced by anyone and in any way resulting from the conduct and operation of Franchisee's business, less any sales of merchandise for which cash has been refunded, and any applicable sales, use or service taxes collected and paid to the appropriate taxing authority in any week from any source.
Gross Sales include all amounts received in the form of cash, credit coupons, rebates, agreements to pay, or other consideration, including the actual value of any goods or services traded, bartered, or otherwise received by Franchisee in exchange for any form of monetary or non-monetary consideration, and whether or not payment is received at the time of sale or any such amounts prove uncollectible.
Gross Sales also include all amounts that arise from or are derived by Franchisee or by any other person under the Franchised Business or from any business conducted or which originates in, on, from, or through the Franchised Business, whether such business is conducted in compliance with or in violation of the terms of the Franchise Agreement, or from any business which is derived from or similar to the business activities embodied by the Franchised Business.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, 'Gross Sales' encompasses all revenues invoiced from the operation of the franchise, irrespective of who invoices them or how the revenues are generated. This includes revenues from cash, credit, coupons, rebates, agreements to pay, or any other form of consideration. The gross sales also take into account the actual value of goods or services that are traded or bartered.
Specifically excluded from the gross sales calculation are cash refunds for merchandise sales and any applicable sales, use, or service taxes that the franchisee collects and remits to the appropriate taxing authority. This means that City Wide franchisees do not pay royalties on refunded sales or taxes collected on behalf of the government.
Furthermore, City Wide's definition extends to all amounts derived from the franchise business, regardless of whether the business is conducted in compliance with the franchise agreement. This broad definition ensures that all revenue streams connected to the franchise contribute to the gross sales figure, which is typically used to calculate royalty payments and other fees payable to City Wide. This also includes revenue generated by the franchisee or any other person under the franchised business.