How are Gross Sales calculated for the Royalty Rebate after a City Wide franchise transfer?

According to City Wide's 2025 Franchise Disclosure Document, if a franchise is eligible for a Royalty Rebate and undergoes a transfer involving a change in control or a sale of the business, the Royalty Rebate will be split between the franchisee and the transferee on a pro rata basis. This split is determined by the number of months each party owned the franchise business during the relevant period. To calculate the Gross Sales for determining the Royalty Rebate, City Wide will combine the Gross Sales of the franchisee before the transfer with the Gross Sales generated by the transferee after the transfer.

For a City Wide franchisee, this means that if you sell your franchise, the Royalty Rebate for that year will be divided based on how long you and the buyer each owned the business. The calculation of Gross Sales will include the entire year's revenue, combining your sales before the transfer with the new owner's sales after the transfer. This ensures that the Royalty Rebate eligibility is assessed on the total annual performance of the franchise, regardless of the transfer.

It's important to note that the specific criteria for the Royalty Rebate Program are detailed in the Operating Manual and are subject to change. The Royalty Rebate Program guidelines state that if a franchised business generates verifiable Gross Sales of $10,000,000 or greater solely within the Designated Territory in any calendar year, the franchisee will receive a one percent (1%) Royalty Rebate on Royalty Fees paid in that calendar year. The franchisee must re-qualify for the Royalty Rebate Program each year for each Designated Territory, as there is no carryover of eligibility from one calendar year to the next.