Under what conditions is the Successor Fee paid to City Wide?
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.
Source: Item 6 — OTHER FEES (FDD pages 16–20)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, a Successor Fee is required if a franchisee meets the conditions to be granted an additional term once the current term of their Franchise Agreement expires. The Successor Fee is 50% of the then-current Initial Franchise Fee and is paid at the time of signing the Successor Franchise Agreement.
In practical terms, this means that if a City Wide franchisee wishes to continue operating their franchise after the initial franchise term concludes, they will need to apply for a successor franchise agreement. If City Wide approves this renewal, the franchisee must pay a fee equal to half of what a new franchisee would currently pay to start a City Wide franchise.
This fee covers City Wide's administrative costs associated with renewing the franchise agreement and ensuring the franchisee continues to meet the brand's standards. It is important for prospective franchisees to consider this future cost when evaluating the long-term financial viability of a City Wide franchise. Franchisees should also inquire about the specific criteria for being granted an additional term to understand the conditions they must meet to qualify for renewal.