What is the consequence of not remaining in good standing for a Cicis franchisee under the Reopen Incentive Program Addendum?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
te, or a third party unaffiliated with you and was permanently closed or has been temporarily closed for an extensive period. The franchise agreement that previously governed the owner's operation of the Restaurant has been terminated. You and we have entered into the Franchise Agreement to govern your ownership and operation of the previously closed Restaurant from and after the Effective Date.
-
- Reopening of the Restaurant. You agree that you will, at your expense, take the actions described on Attachment A hereto to remodel and refresh the Restaurant (the "Refresh Obligations") prior to reopening the Restaurant, and you will complete the Refresh Obligations and reopen the Restaurant for regular business in accordance with the Franchise Agreement by no later than the Reopening D
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, failure to remain in good standing under the Reopen Incentive Program Addendum can have significant financial repercussions for a franchisee. Good standing is defined as compliance with all material obligations under the Franchise Agreement and other agreements with Cicis. The franchisor has sole discretion in determining what constitutes a 'material' obligation, and their decision is final.
Specifically, if a Cicis franchisee fails to maintain good standing, the franchisor reserves the right to revoke certain financial incentives. For instance, the initial franchise fee may be increased back to the full amount required under the Franchise Agreement, potentially costing the franchisee thousands of dollars. In the context of a Development Agreement, both the reduction of the Development Fee and the reduction of the Initial Franchise Fee under Qualifying Franchise Agreements can be revoked, requiring the franchisee to pay the full amounts.
These provisions highlight the importance of adhering to all contractual obligations with Cicis. The loss of 'good standing' can trigger substantial financial liabilities, negating the benefits of the incentive program. Prospective franchisees should carefully review the definition of 'Good Standing' in the franchise agreement and related addenda to fully understand their obligations and the potential consequences of non-compliance.