How are Advertising National and Royalty Expenses shown in the Cicis financial tables?

According to Cicis's 2025 Franchise Disclosure Document, the Advertising National and Royalty Expenses, along with their corresponding adjustments, are presented in the financial tables as both a dollar amount and as a percentage of Fee Based Net Sales. This approach aligns with Cicis's current practice of not requiring franchisees to pay royalties and fund contributions on Game Room Sales. All other financial metrics in the tables are shown as dollar amounts and as a percentage of Net Company Sales, which is the sum of Fee Based Net Sales and Game Room Sales.

For example, in the table presenting average annual metrics, Advertising National is listed as $64,751, representing 4.9% of Fee Based Net Sales, while Royalty Expenses are $59,367, or 4.5%. There are also adjustments made to these figures. The Advertising National Adjustment is $1,648, or 0.1%, and the Royalty Adjustment is $7,031, or 0.5%. These adjustments account for differences in payment amounts due to some franchisees being subject to older franchise agreements with lower payment requirements.

This distinction is important for prospective franchisees to understand because it clarifies how different revenue streams are used to calculate these expenses. By excluding Game Room Sales from the royalty and advertising calculations, Cicis provides a more transparent view of the costs associated with the core food and beverage sales. Franchisees can use this information to better forecast their expenses and understand the impact of Game Room Sales on their overall profitability. The adjustments further refine these calculations to reflect current franchise agreement terms, ensuring a more accurate representation of potential expenses.