What is City Wide's policy on independently verifying franchisee-supplied financial figures?

According to City Wide's 2025 Franchise Disclosure Document, City Wide does not independently verify the financial figures submitted by its franchisees. The financial data presented in Item 19, including gross sales, monthly gross sales, net royalties, independent labor costs, and gross margins, are based on reports generated from City Wide's required accounting software and submitted by the franchisees themselves. While City Wide states it has no reason to believe franchisees would overstate financial information, it acknowledges that the data has not been audited.

This policy means that prospective franchisees should be aware that the financial performance representations provided by City Wide are based on unverified data. While City Wide maintains written substantiation to support the information in Item 19, it is the franchisee's responsibility to conduct their own due diligence and potentially seek independent verification of the financial data if they deem it necessary. The FDD does state that written substantiation for the financial performance representation will be made available to the prospective franchisee upon reasonable request.

Given that the financial figures are self-reported and not audited, there is a risk that the data may not be entirely accurate. Prospective franchisees should consider this when evaluating the potential financial performance of a City Wide franchise. It is advisable to speak with existing franchisees and, if possible, review their independently audited financial statements to gain a more comprehensive understanding of the business's financial performance. Prospective franchisees should also consider consulting with a financial advisor to assess the risks and opportunities associated with investing in a City Wide franchise.

In the franchise industry, it is not uncommon for franchisors to rely on franchisee-submitted data for financial performance representations, especially if the data is generated through a standardized accounting system. However, some franchisors may conduct audits or require franchisees to submit independently audited financial statements. The lack of independent verification in City Wide's case highlights the importance of thorough due diligence on the part of the prospective franchisee.