What is the City Wide Successor Fee?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
4 months | $2,900/mo. | | | 25 and all months thereafter | $3,350/mo. | | | Type of Fee1 | Amount | Due Date | Remarks | |-------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | | you under the franchise | | | | | agreement | | | | | (including the Initial | | | | | Fees). The Transfer Fee is in | | | | | addition to any third-party | | | | | broker fee. No Transfer Fee is | | | | | assessed for a transfer to your | | | | | survivor. | | Audit | Amount of underpayment, plus interest at highest legal rate, not to exceed 10%. If underpayment is 2% or more, you must reimburse CITY WIDE for its audit costs. Audit costs may run as much as $6,000. | Upon billing by CITY WIDE. | Payable only if audit shows an understatement of at least 2% of Gross Sales for any month. | | Successor Fee | 50% of the then current Initial Franchise Fee. | At the time of signing the Successor Franchise Agreement. | The Successor Fee is paid if you meet the conditions to be granted an ad
Source: Item 6 — OTHER FEES (FDD pages 16–20)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, the Successor Fee is 50% of the then-current Initial Franchise Fee. This fee is paid if a franchisee meets the conditions to be granted an additional term once the current term of their Franchise Agreement expires. The fee is due at the time of signing the Successor Franchise Agreement.
In simpler terms, if a City Wide franchisee wants to renew their franchise agreement for another term, they will need to pay a Successor Fee. This fee is calculated as half of whatever the current Initial Franchise Fee is at the time of renewal. For example, if the Initial Franchise Fee is $50,000 when the franchisee seeks to renew, the Successor Fee would be $25,000.
This fee is important for prospective franchisees to consider as part of their long-term financial planning. Franchise agreements typically have a set term (e.g., 10 years), and franchisees need to factor in the cost of renewal if they plan to continue operating the business beyond the initial term. The Successor Fee can represent a significant expense, so it's crucial to understand how it's calculated and when it's due. Franchisees should also be aware that the Initial Franchise Fee can change over time, so the Successor Fee could be higher or lower than expected at the time of renewal.