What is the relationship between City Wide Franchise Company, City Wide Franchise of Canada, and City Wide Franchise International?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
upplies, carpet cleaning, window washing, construction clean-up, blind cleaning, hard surface floor care, pest control, upholstery cleaning, concrete coatings, and other commercial services to a variety of commercial customers, all of which are conducted in the territory in which the franchisee is designated to operate.
Principles of Consolidation
The consolidated financial statements include the accounts of City Wide Franchise Company, Inc. and its whollyowned subsidiaries, City Wide Franchise Company of Canada, Inc. (an entity domiciled in British Columbia, Canada) and City Wide International Franchise Company, collectively "the Company." All significant intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all liquid investments with original maturities of three months or less to be cash equivalents. Cash and cash equivalents consisted primarily of deposit accounts with financial institutions.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, City Wide Franchise Company, Inc. operates with two wholly-owned subsidiaries: City Wide Franchise Company of Canada, Inc., domiciled in British Columbia, Canada, and City Wide International Franchise Company. These entities are collectively referred to as "the Company" in the consolidated financial statements. All significant intercompany accounts and transactions are eliminated during the consolidation process for financial reporting. This means that the financial performance of all three entities is combined to provide an overall view of City Wide's financial position.
The consolidated balance sheet as of December 31, 2024, shows the individual assets and liabilities of each entity, along with a column for "Eliminating Entries" and a final column for the "2024 Consolidated" figures. For example, City Wide Franchise Company, Inc. has cash and cash equivalents of $23,966,250, while City Wide Franchise of Canada, Inc. has $307,078, and City Wide Franchise International, Inc. has none. After eliminations, the consolidated cash and cash equivalents total $24,273,328. Similarly, accounts payable for City Wide Franchise Company, Inc. are $16,107,270, for City Wide Franchise of Canada, Inc. are $930,438, and for City Wide Franchise International, Inc. are $386,397. After eliminating entries, the consolidated accounts payable are $16,356,455.
For a prospective franchisee, understanding this relationship is crucial because it clarifies how City Wide manages its international operations from a financial perspective. The consolidation of financial statements indicates a unified financial strategy and oversight. However, the individual performance of each entity can vary, as seen in the balance sheet figures. While City Wide Franchise Company, Inc. and City Wide Franchise of Canada, Inc. both have significant assets and liabilities, City Wide Franchise International, Inc. shows minimal activity, suggesting it may primarily function as a holding or development entity. This structure allows City Wide to manage its North American and international franchising activities under a single corporate umbrella, streamlining financial reporting and potentially optimizing tax and legal strategies.
It is also important to note that the independent auditor's report covers the consolidated financial statements, providing an opinion on the overall financial position of the combined entities. This audit, conducted according to generally accepted auditing standards in the United States of America, ensures that the financial statements are presented fairly and accurately reflect the financial status of City Wide and its subsidiaries. The auditor's report, dated March 20, 2025, confirms that the audit evidence obtained was sufficient and appropriate to provide a basis for their audit opinion.