Who determines the Minimum Total Revenue Retention Requirement for a City Wide franchise?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
The total revenue retention of Franchisee's Franchised Business must not fall below seventy-seven and five-tenths percent (77.5%) for any rolling twenty-four (24) month period for Franchisee's Business ("Minimum Total Revenue Retention Requirement"), as determined by CITY WIDE in its sole and absolute discretion.
Franchisee acknowledges and agrees that Franchisee's failure to comply with the Minimum Total Revenue Retention Requirement shall constitute a material default of this Agreement for which CITY WIDE may terminate this Agreement.
In the event that Franchisee fails to comply with the Minimum Total Revenue Retention Requirement, CITY WIDE also reserves the right to take corrective action with respect to Franchisee's Franchised Business, which may include the implementation of a plan with which Franchisee agrees to comply.
Franchisee may adjust the Minimum Total Revenue Retention Requirement upon a 30-day prior written notice to Franchisee based upon the increase in the Consumer Price Index as currently measured by the Index as defined below, but not to exceed 3%.
For purposes of this section, "Index" shall mean (i) the increase in the Consumer Price Index for all Urban Consumers, U.S.
City Average (1982-84 = 100) published by the Bureau of Labor Statistics of the United States Department of Labor.
When the rate is increased, CITY WIDE will notify you and the increase will appear in the Manual.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, City Wide determines the Minimum Total Revenue Retention Requirement for its franchisees. The FDD specifies that the total revenue retention of a franchisee's business must not fall below 77.5% for any rolling 24-month period. This benchmark, referred to as the Minimum Total Revenue Retention Requirement, is determined by City Wide at its sole discretion.
Failure to meet this requirement constitutes a material default of the Franchise Agreement, potentially leading to termination of the agreement by City Wide. In cases where a franchisee fails to comply with the Minimum Total Revenue Retention Requirement, City Wide reserves the right to implement a corrective action plan for the franchisee's business.
Franchisees do have a limited ability to adjust the Minimum Total Revenue Retention Requirement, but only based on increases in the Consumer Price Index. This adjustment is capped at a maximum of 3% and requires the franchisee to provide City Wide with 30 days' prior written notice. Any rate increase implemented by City Wide will be communicated to the franchisee and documented in the Operating Manual.