Is Cicis' decision regarding 'material' obligations for determining good standing final?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
"Good Standing" means that you are in compliance with all material obligations under the Franchise Agreement, and you and your affiliates are in compliance with all material obligations under any other agreements between us and you or them. You agree that we will have sole discretion to determine whether particular obligations are "material" for purposes of determining good standing, and our decision will be final.
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis' 2025 Franchise Disclosure Document, Cicis retains the sole discretion to determine whether particular obligations are considered "material" when assessing a franchisee's good standing. This determination is final, according to the FDD. This applies to instances where franchisees are seeking benefits such as a reduction of the initial franchise fee or participation in the Veterans Incentive Program.
This means that Cicis has the ultimate authority in deciding which obligations are critical for a franchisee to meet in order to be considered in good standing. If Cicis determines that a franchisee has failed to meet a 'material' obligation, the franchisee could lose benefits like reduced fees or program participation.
For a prospective Cicis franchisee, this highlights the importance of understanding and adhering to all obligations outlined in the franchise agreement and other related agreements. Because Cicis' decision on what constitutes a material obligation is final, franchisees should seek clarity on any obligations that seem unclear or potentially burdensome. Maintaining open communication with the franchisor and diligently fulfilling all requirements is crucial to remaining in good standing and retaining all associated benefits.