For City Wide franchisees, what constitutes 'Gross Sales' for the purpose of calculating the Royalty Fee?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
IDE. All fees are nonrefundable unless otherwise stated.
- (2) Royalty Fee: You are required to pay to CITY WIDE a royalty fee ("Royalty Fee") the greater of 5% of total Gross Sales or the minimum Royalty Fee ("Minimum Royalty Fee"). "Gross Sales" includes all of the Franchised Business's revenues invoiced by anyone and in anyway resulting from the conduct and operation of your Franchised Business, or from any business which is derived from or similar
to the business activities embodied by the Franchised Business (See Section 3.5 of the Franchise Agreement). You must also pay CITY WIDE as an additional Royalty Fee a sum equal to any excise, sales, or privilege tax that any government or governmental agency levies or imposes on CITY WIDE on account of the Franchise Agreement, or any consideration or fee you pay under this Agreement (but the taxes contemplated by the preceding clause do not include any income or corporate franchise tax imposed on CITY WIDE). The Minimum Royalty Fee is determined as follows:
Minimum Royalty Fee Chart (Over 1,000,000 population in Designated Territory) *
| Months in Operation | Minimum Royalty Fee |
|---|---|
| 1-6 months | No Minimum Royalty Fee |
| 7-9 months | $1,000/mo. |
| 10-12 months | $1,400/mo. |
| 13-15 months | $1,800/mo. |
| 16-18 months | $2,250/mo. |
| 19-21 months | $2,700/mo. |
Source: Item 6 — OTHER FEES (FDD pages 16–20)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, the Royalty Fee is the greater of 5% of total Gross Sales or a Minimum Royalty Fee. For City Wide franchisees, "Gross Sales" includes all revenues invoiced by anyone resulting from the operation of the franchised business. This also includes revenue from any business derived from or similar to the activities embodied by the franchised business. Franchisees must also pay City Wide an additional Royalty Fee equal to any excise, sales, or privilege tax that a government levies on City Wide due to the Franchise Agreement. However, this does not include any income or corporate franchise tax imposed on City Wide.
City Wide also administers a Royalty Rebate Program. Franchisees may be able to receive a Royalty Rebate in a given calendar year if they exceed certain thresholds in Gross Sales in their Designated Territory and comply with City Wide's system standards as set forth in the Operating Manual, as determined by City Wide.
Minimum Royalty Fees vary based on the franchisee's months in operation and the population of their designated territory. For territories with over 1,000,000 in population, there is no minimum royalty fee for the first 6 months. It then scales from $1,000/month in months 7-9 to $5,000/month after 37 months. For territories under 1,000,000 in population, the minimum royalty fee scales from $750/month in months 7-9 to $3,350/month after 25 months.