Is Cicis' decision final regarding whether particular obligations are 'material' for purposes of determining good standing in the Veterans Incentive Program?

According to Cicis's 2025 Franchise Disclosure Document, Cicis retains sole discretion in determining whether specific obligations are considered "material" when assessing a franchisee's good standing within the Veterans Incentive Program. This determination directly impacts a franchisee's eligibility to participate in the program and receive associated benefits, such as waivers on the initial franchise fee or development fee. Cicis's decision on what constitutes a material obligation is final.

For a prospective Cicis franchisee participating in the Veterans Incentive Program, this means that Cicis has the ultimate authority to decide which obligations are critical for maintaining good standing. Failure to comply with these material obligations, as defined by Cicis, can lead to revocation of the franchisee's participation in the program and loss of benefits like fee waivers. This could result in the franchisee having to pay the full initial franchise fee or development fee, which would otherwise be waived.

This level of discretion afforded to the franchisor is not uncommon in franchising, as franchisors need to ensure brand standards and operational consistency are maintained across all locations. However, it places a significant responsibility on Cicis to clearly communicate which obligations are deemed material and to apply this standard consistently across all franchisees participating in the Veterans Incentive Program. A prospective franchisee should seek clarity on these material obligations and understand the potential consequences of non-compliance before entering into a franchise agreement with Cicis.