What is 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%.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, franchisees must maintain a minimum total revenue retention. This means that for any rolling 24-month period, a City Wide franchise's total revenue retention must not fall below 77.5%. City Wide determines whether a franchisee meets this requirement at its sole discretion.
Failure to meet the Minimum Total Revenue Retention Requirement constitutes a material breach of the franchise agreement. If a franchisee fails to meet this requirement, City Wide has the right to terminate the agreement. City Wide may also take corrective action, including implementing a plan that the franchisee must comply with.
Franchisees have a limited ability to adjust this requirement. They can increase the Minimum Total Revenue Retention Requirement based on increases in the Consumer Price Index, providing City Wide with 30 days' prior written notice. However, this adjustment cannot exceed 3%.
This revenue retention requirement is an important factor for prospective franchisees to consider. It sets a clear expectation for business performance and creates potential consequences for underperformance, including possible termination of the franchise agreement. The ability to make minor adjustments based on the Consumer Price Index offers some flexibility, but the primary responsibility for maintaining revenue retention rests with the franchisee.