Does Cicis administer a marketing fund?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
cis Restaurants provide ("Cicis Website").
Marketing Fund
You will be required to contribute 5% of your Cicis Restaurant's Net Sales to a marketing fund for the purpose of promoting the Cicis Restaurants, the System (and any aspect thereof), and the Marks generally and to develop tools and technology to advance that objective (the "Fund"). Cicis Restaurants owed by our affiliates also contribute to the Fund at the same rate as our franchisees.
Prior to the date of this Disclosure Document, the Fund was administered by our affiliate, CiCi Enterprises. We currently administer the Fund and have sole discretion to approve the creative concepts, advertising, marketing materials and media used in the programs and their creation, development, placement and allocation. We may use the Fund to satisfy the costs of planning, maintaining, administering, directing, preparing and placing marketing. This includes all associated costs of development, production and placement of marketing, which may include but are not limited to traditional and non-traditional advertising and media placement, product innovation, consumer research, consumer and operational testing for the purpose of marketing programs and other departmental costs, including personnel and associated compensation for marketing that we administer, incur, or prepare on behalf of the Fund, including Cicis Websiterelated costs. We may, in our discretion, keep your contributions to the Fund in a separate account but will, in any event, account for them separately from our general operating funds. We will not use the Fund to pay any of our general operating expenses, except for reasonable administrative costs and overhead (if any) that we incur in administering or directing the Fund. We will operate the Fund solely as a conduit for collecting and spending the contributions to the Fund.
We will prepare an annual statement of the Fund's collections and expenses and will make this statement available to you, on your written request, within 120 days after our fiscal year end. We are not required to have the Fund statements audited.
Contributions to the Fund that are not spent in the year in which they are contributed are carried over to succeeding years. Historically, our affiliate has spent virtually all Fund contributions in the year in which they were contributed. Although the Fund is intended to be perpetual, we may
terminate the Fund. We will not terminate the Fund, however, until all Fund monies have been spent for marketing or promotional purposes or returned to the contributors, without interest, based on their respective contributions.
The following is a percentage breakdown of the usage of the Fund during the 2024 fiscal year:
| Media | 87% |
|---|---|
| Production | 5% |
| General & Administrative Expense | 8% |
| Total: | 100% |
We are not required to make any expenditure that is equivalent or proportionate to your contribution to the Fund or to ensure that any particular franchisee benefits pro rata from the placement of marketing. Less than 1% of the Fund contributions were spent to principally solicit the sale of franchises.
Local Marketing Spend
In addition to your required Fund contributions, we require you to spend at least 1% of monthly Net Sales on local marketing in your Protected Area (your "Local Marketing Spend"). Your Local Marketing Spend must satisfy our standards and be approved by us. You must give us a Local Marketing Spend report at the same time as the Net Sales report.
You must conduct a grand opening promotion for your Cicis Restaurant. We must approve the timing and all marketing items and methods (including the media) that you use for the grand opening promotion. You must spend at least $10,000 on marketing expenditure for the grand opening of your Cicis Restaurant. The expenses you incur for the grand opening promotion will not be credited toward your required Local Marketing Spend or any of your other marketing obligations and must be provided prior to the opening of your Cicis Restaurant. You may be reimbursed the expenses you incurred and paid in executing a grand opening promotion for your Cicis Restaurant (less salaries and benefits paid to your owners or employees), up to the amount of the Renewal Fee you paid, if any, if you sign and satisfy the conditions under the Underperforming Incentive Program Addendum, attached as Exhibit D-4 to this Disclosure Document.
You must also place any business listings we require in your local market area.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 31–38)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, Cicis does administer a marketing fund, referred to as the "Fund". Franchisees are required to contribute 5% of their Cicis Restaurant's Net Sales to this Fund. The purpose of the Fund is to promote Cicis Restaurants, the System, the brand, and to develop tools and technology to advance these objectives. Cicis Restaurants owned by affiliates also contribute to the Fund at the same rate as franchisees.
Cicis has the sole discretion to approve the creative concepts, advertising, marketing materials, and media used in the programs, including their creation, development, placement, and allocation. The Fund can be used to cover the costs of planning, maintaining, administering, directing, preparing, and placing marketing efforts. This includes all associated costs of development, production, and placement of marketing, such as traditional and non-traditional advertising, media placement, product innovation, consumer research, and other departmental costs, including personnel and compensation for marketing activities administered by Cicis. Cicis may keep contributions in a separate account but will account for them separately from their general operating funds. The Fund will not be used for general operating expenses, except for reasonable administrative costs and overhead incurred in administering the Fund.
Cicis will prepare an annual statement of the Fund's collections and expenses, which will be available to franchisees upon written request within 120 days after the fiscal year end. These statements are not required to be audited. Contributions not spent in the year they are contributed are carried over to succeeding years. While the Fund is intended to be perpetual, Cicis may terminate it, but only after all monies have been spent for marketing or promotional purposes or returned to the contributors, without interest, based on their respective contributions.
In addition to the Fund, franchisees are also required to spend at least 1% of monthly Net Sales on local marketing in their Protected Area, which must meet Cicis's standards and be approved by them. Franchisees must also conduct a grand opening promotion, spending at least $10,000 on marketing expenditure, which is not credited toward the local marketing spend. Cicis may reallocate marketing contributions and expenditures to the Fund, Local Marketing, or a Cooperative, but cannot increase the total amount franchisees must pay for marketing.