What are the consequences of failing to comply with Cicis's System Standards described in Item 8, as they relate to the non-compliance fee outlined in Item 6?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
ITEM 6 OTHER FEES*
| Type of Fee(1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee | 5% of Net Sales for a Cicis Buffet Restaurant; 6% of Net Sales for a Cicis To Go Restaurant (subject to reduction for participation in current incentive programs). | The day of the week we specify (currently, Thursday) | See Notes 2, 3, 4, and 5 |
| Non-Compliance Fee | $250 per failure to comply with the Franchise Agreement, plus, your royalty fee will increase by one (1) percentage point until you have cured all deficiencies | On demand, the day after non- compliance occurs | Payable only if you are in default of your obligations under the Franchise Agreement. |
| Technology and Support Fee | $100 per month | When billed (currently, first day of the month) | The Technology and Support Fee is in addition to all direct out-of-pocket costs you must otherwise incur under the terms of the Franchise Agreement or the Manual to acquire and maintain the required computer system and technology. |
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, franchisees must strictly comply with all System Standards to maintain the quality and uniformity of Cicis Restaurants. These standards encompass a wide array of operational aspects, including food products, menu items, restaurant construction, and marketing materials. Failure to adhere to these standards can trigger a non-compliance fee.
Specifically, Item 6 outlines that a franchisee will be charged a Non-Compliance Fee of $250 for each failure to comply with the Franchise Agreement. Additionally, the franchisee's royalty fee will increase by one percentage point until all deficiencies are corrected. This fee is payable on demand, the day after the non-compliance occurs, but only if the franchisee is already in default of their obligations under the Franchise Agreement.
This policy underscores the importance Cicis places on maintaining brand consistency and operational standards across all franchise locations. The financial penalties, including both the immediate fee and the increase in royalty payments, are designed to incentivize franchisees to promptly address and rectify any deviations from the established System Standards. Prospective franchisees should carefully review Item 8 and the Operations Manual to fully understand these standards and ensure they can consistently meet them to avoid incurring these fees.