What was the loss on abandonment of software subscription for City Wide in 2024?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
Operating Activities Net income Items not requiring (providing) cash Depreciation Bad debt expense Noncash operating lease cost Loss on abandonment of software subscription Effect of foreign currency translation (gain) loss Deferred compensation Changes in Accounts receivable Deferred franchise costs and prepaid expenses Inventory Software subscription Accounts payable | 3,969,091 | 2,603,540 | 3,211,061 | | 920,639 | 113,353 | 363,757 | Accrued expenses | (182,963) | (180,007) | (177,099) | Operating lease liabilities | Deferred franchise revenue and other deferred income Deferred compensation Refundable advance Net cash provided by operating activities Investing Activities Purchase of property and equipment Increase in cash value of life insurance Issuance of notes receivable - franchisees Issuance of notes receivable - stockholder Payments received on notes receivable Net cash provided by (used in) investing activities Financing Activities Distributions to stockholders Net cash used in financing activities Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents, Beginning of Year Cash and Cash Equivalents, End of Year Supplemental Cash Flows Information Property and equipment, net in accounts payable Software subscription in accounts payable Dividends applied to notes receivable | $ 60,733 - - | $ - 631,500 373,396 | $ - - - |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, the company experienced a loss on abandonment of a software subscription amounting to $1,454,554 during the year 2024. This indicates that City Wide discontinued using a software subscription before its intended lifespan, resulting in the noted financial loss.
This loss is further clarified in the document, noting that during 2023, City Wide entered into a multi-year software subscription, which was accounted for as a cloud computing arrangement. However, in 2024, the company abandoned this arrangement, leading to the $1,454,554 loss. This suggests that the software subscription did not meet the company's needs or was no longer viable for their operations.
For a prospective franchisee, this information highlights the potential risks associated with technology investments and the importance of carefully evaluating software solutions before committing to long-term subscriptions. It also demonstrates that City Wide is willing to absorb significant losses when necessary, which could be seen as a sign of proactive management. A potential franchisee might want to inquire about the due diligence process City Wide undertakes before investing in software and other technology solutions to better understand how such losses are avoided or mitigated.