How is the monthly Royalty Fee calculated for a City Wide franchise?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3.7 Recurring Fees. Beginning on the first day that the Franchised Business is open for business to the public as determined by CITY WIDE and continuing through the Term of this Agreement, Franchisee must pay CITY WIDE the following recurring fees without offset, credit or deduction of any nature:
- 3.7.1 Royalty Fee. A monthly royalty fee (“Royalty Fee”) equal to the greater of five percent (5%) of the Gross Sales (including National Accounts) or the minimum Royalty Fee (“Minimum Royalty Fee”), as outlined in the appropriate chart below:
Territory, CITY WIDE will first offer the Order to Franchisee at the price CITY WIDE established with the Top-Down Account. If Franchisee is unwilling or unable to fulfill the Order CITY WIDE's affiliate, Arete or a third party CITY WIDE designee (including another franchisee) may fulfill that particular Order. Franchisee will not receive compensation for any Order Franchisee does not service.
If Franchisee's monthly Royalty Fees from all sources total less than the Minimum Royalty Fees outlined in the Minimum Royalty Fee charts outlined in Section 3.7.1 above, then the applicable Minimum Royalty Fees shall be paid by Franchisee to CITY WIDE.
- 3.8 Timing of Payments; ACH Electronic Withdrawals.
Unless otherwise provided in the Operating Manual, although calculated on a monthly basis, Franchisee must pay CITY WIDE the Royalty Fees and Marketing Fees and other amounts due to CITY WIDE under this Agreement, fully close monthly financial statements and submit any reports due CITY WIDE under this Agreement every month, on or before the tenth (10th) day of each month.
All such Royalty Fees, Marketing Fees and other amounts due shall be tendered to CITY WIDE via ACH electronic withdrawal on or before their respective due dates.
- 3.10 Beginning of Week and Month.
For purposes of calculating the Royalty Fees and Marketing Fees, a week begins at 12:01 a.m. on Monday and ends at midnight the following Sunday; a month begins at 12:01 a.m. on the first day of each calendar month or a portion for the first month of operation and ends at midnight on the last day of each calendar month.
- 3.14.1 If the Franchised Business has verifiable Gross Sales generated solely in the Designated Territory in any calendar year of $10,000,000 or greater, Franchisee will receive a one percent (1%) Royalty Rebate on Royalty Fees paid in that calendar year.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, franchisees must pay a monthly royalty fee. This Royalty Fee is the greater of 5% of Gross Sales (including National Accounts) or the Minimum Royalty Fee, as outlined in the provided chart.
The Royalty Fees and Marketing Fees, along with any other amounts due, must be paid to City Wide via ACH electronic withdrawal on or before the 10th day of each month, unless otherwise specified in the Operating Manual. For the purposes of calculating these fees, a month begins at 12:01 a.m. on the first day of each calendar month and ends at midnight on the last day of the month.
If a franchisee's monthly Royalty Fees from all sources total less than the Minimum Royalty Fees outlined in the Minimum Royalty Fee charts, then the franchisee is responsible for paying the applicable Minimum Royalty Fees to City Wide. Additionally, franchisees may be eligible for a Royalty Rebate of one percent (1%) on Royalty Fees paid in a calendar year if the Franchised Business has verifiable Gross Sales generated solely in the Designated Territory of $10,000,000 or greater in that calendar year.