What constitutes 'Good Standing' for a Cicis franchisee under the Development Incentive Program Addendum?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
eements, at least five (5) Cicis Pizza Restaurants. In light of your acquisition of the Development Rights and your agreement to remain in good standing (as defined below), we have agreed to allow you to participate in our Development Incentive Program (the "Program") with respect to the Development Agreement and Franchise Agreements that you or your affiliates execute pursuant to the Development Agreement from and after the Effective Date of this Addendum (the "Qualifying Franchise Agreements"). We may revoke your participation in the Program if, at any time, we determine that you no longer qualify to participate.
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- Reduction of Development and Initial Franchise Fees. Section 3 of the Development Agreement is supplemented and amended by adding the following to the end of the Section:
While you are approved to participate in the Program and provided you and your affiliates remain in good standing, we agree that the Development Fee will be reduced to $10,000 times the total number of Restaurants to be developed hereunder, and the Initial Franchise Fee under each Qualifying Franchise Agreement shall be reduced to $10,000. We reserve the right to revoke the foregoing reductions at any time you are no longer approved to participate in the Program or you ceas
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, 'Good Standing' within the Development Incentive Program Addendum means that the franchisee and their affiliates must comply with all material obligations under the Franchise Agreement, the Development Agreement (including the Development Schedule), and all other agreements between Cicis and the franchisee or their affiliates, regardless of whether these agreements were executed pursuant to the Development Agreement.
Cicis retains sole discretion to determine which obligations are considered 'material' for the purpose of assessing good standing, and their decision is final. This gives Cicis significant control over the criteria for maintaining 'Good Standing' and, consequently, the benefits of the Development Incentive Program.
For a prospective Cicis franchisee, this definition highlights the importance of adhering to all agreements with Cicis and their development schedule. Failure to comply with what Cicis deems a 'material' obligation could result in the loss of incentives, such as reductions in the Development Fee and Initial Franchise Fee, potentially increasing the franchisee's financial burden. Franchisees should seek clarity from Cicis regarding what specific obligations are considered 'material' to minimize the risk of inadvertently falling out of 'Good Standing'.