For City Wide franchises, what is included in the definition of 'Gross Sales' for royalty fee calculation?
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. Gross Sales includes all revenues invoiced by anyone resulting from the operation of your franchised business, or from any business derived from or similar to the activities of your 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, or any consideration or fee paid under the agreement. However, this does not include income or corporate franchise taxes imposed on City Wide.
City Wide also administers a Royalty Rebate Program, where franchisees may receive a royalty rebate in a given calendar year if they exceed certain Gross Sales thresholds in their Designated Territory and comply with City Wide's system standards as set forth in the Operating Manual. The specific thresholds and standards are determined by City Wide at its sole and absolute right.
The minimum royalty fee varies based on the franchisee's months in operation and the population in their designated territory. For example, for territories with over 1,000,000 population, the minimum royalty fee ranges from no minimum for the first 6 months to $5,000 per month after 37 months. For territories under 1,000,000 population, the minimum royalty fee ranges from no minimum for the first 6 months to $3,350 per month after 25 months.