What is the dependency between the Cicis Franchise Agreement and the Veteran's Incentive Program Addendum?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
On Smile LLC ("we") and the "Franchisee" identified below ("you" and, together with us, the "Parties") execute this Veteran's Incentive Program Addendum (the "Addendum") to supplement and amend that certain Franchise Agreement they have executed immediately prior to the execution of this Addendum (as it might have otherwise been amended, the "Franchise Agreement"). The "Effective Date" of this Addendum is the same as the Effective Date of the Franchise Agreement. Capitalized terms used but not defined in this Addendum have the meanings given them in the Franchise Agreement. For valuable consideration, receipt and sufficiency of which are acknowledged, the Parties agree as follows:
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- Representations Regarding Veteran Status. You have asked to participate in our Veterans Incentive Program (the "Program") and, in support of your request, have provided us with information, whether as part of the Application Materials or separately (the "Supporting Information"), to confirm your qualifications to participate in the Program. You represent and warrant to us that the Supporting Information is true and correct and that you satisfy all of our requirements for participation in the Program. In reliance on the foregoing, we approve your participation in the Program with respect to Franchise Agreement. You must promptly notify us, in writing, if any of the Supporting Information changes or ceases to be true and correct. We may revoke your participation in the Program if, at any time, we determine that you no longer qualify for participation.
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- Waiver of Initial Franchise Fee. We hereby waive your obligation to pay us an Initial Franchise Fee while you are approved to participate in the Program and remain in good standing. We reserve the right to revoke the waiver at any time you are either no longer approved to participate in the Program or cease to be in good standing, in which case, you will pay us the Initial Franchise Fee which, absent the waiver, is required under the Franchise Agreement. "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.
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- Modification of Royalty Fees. The following is added to the end of Section 4.C of the Franchise Agreement:
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, the Veteran's Incentive Program Addendum is designed to supplement and amend the existing Franchise Agreement. The Addendum is executed immediately before or simultaneously with the Franchise Agreement, becoming an integral part of it. The effective date of the Addendum is the same as the effective date of the Franchise Agreement, indicating that the Addendum cannot exist independently of the Franchise Agreement. Capitalized terms within the Addendum that are not specifically defined take on the meanings defined in the Franchise Agreement, further solidifying the dependency between the two documents.
The Veteran's Incentive Program Addendum modifies certain terms of the Franchise Agreement, particularly concerning fees and royalty payments. For instance, the addendum may waive the initial franchise fee for eligible veterans who are approved to participate in the program and remain in good standing. It also outlines conditions under which this waiver can be revoked, such as if the franchisee no longer qualifies for the program or fails to maintain good standing. Good standing is defined as compliance with all material obligations under the Franchise Agreement and other agreements with Cicis.
Furthermore, the Addendum may modify the standard royalty fee structure for a limited time. For example, the royalty fee might be reduced to 3% of net sales for the first year of operation, provided the franchisee remains in the program and in good standing. This reduction is contingent, and the royalty fee reverts to the standard rate if the franchisee ceases to be approved or falls out of good standing. This modification is directly linked to specific sections of the Franchise Agreement, demonstrating how the Addendum alters the original contract.
In essence, the Veteran's Incentive Program Addendum serves as a conditional amendment to the Franchise Agreement, offering benefits to veteran franchisees who meet specific criteria. The Addendum's provisions are entirely dependent on the existence and terms of the Franchise Agreement, and any changes in the franchisee's status or compliance can trigger a return to the original terms of the Franchise Agreement. This interrelation highlights the importance of understanding both documents in their entirety for any prospective Cicis franchisee participating in the Veteran's Incentive Program.