How is 'Adjusted EBITDA' calculated for Cicis restaurants, and what adjustments are made?

According to Cicis's 2025 Franchise Disclosure Document, 'Adjusted EBITDA' is calculated by starting with 'Restaurant EBITDA After' and then subtracting the 'Royalty Adjustment', the 'Technology and Support Fee Adjustment', and the 'Advertising National Adjustment.' These adjustments are necessary to align the financial data from restaurants operating under older franchise agreements with the current agreement terms. This standardization accounts for differences in royalty rates, technology fees, and advertising contributions.

'Restaurant EBITDA After' is derived by taking 'Restaurant EBITDA Before' and deducting the actual royalty and technology and support fees paid by the restaurant. 'Restaurant EBITDA Before' is calculated as 'Net Company Sales' minus 'COGS' (Cost of Goods Sold), 'Payroll Costs', 'Controllable Expenses', 'Advertising National', and 'Non-Controllable Expenses'. 'Net Company Sales' is the sum of 'Fee Based Net Sales' and 'Game Room Sales'.

The purpose of these adjustments is to provide a more accurate representation of potential earnings under the current franchise agreement. Franchisees in the 'Data Set' may have been subject to different royalty rates or technology fee structures, so these adjustments normalize the data. By understanding how 'Adjusted EBITDA' is calculated, prospective franchisees can better evaluate the potential profitability of a Cicis restaurant under the current franchise terms. The average annual 'Adjusted EBITDA' for restaurants in the data set is $158,533, representing 11.3% of sales.