What is the dependency for the modified Royalty Fees under the Cicis Reopen Incentive Program Addendum?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
Provided you remain a participant in the Program (as we determine in our sole discretion) and are in good standing, for Net Sales generated through the 1st anniversary of the Opening Date of the Restaurant, the Royalty Fee will be calculated at 3% of those Net Sales. If, at any time prior to the 1st anniversary of the Opening Date, you cease to be either approved to participate in the Program or in good standing, the foregoing Royalty Fee reduction will automatically, and without any further notice, be null and void, and the Royalty Fee will thereafter be calculated as described in Section 4.C without regard to this paragraph.
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, the modification of royalty fees under the Reopen Incentive Program Addendum is dependent on the franchisee remaining a participant in the program and being in good standing. Specifically, for net sales generated through the first anniversary of the restaurant's opening date, the royalty fee will be calculated at 3% of those net sales, provided the franchisee remains in the program and in good standing.
However, if at any time before the first anniversary of the opening date, the franchisee ceases to be approved to participate in the program or is no longer in good standing, the royalty fee reduction becomes null and void without notice. In such a case, the royalty fee will be calculated as described in Section 4.C of the Franchise Agreement, without regard to the Reopen Incentive Program Addendum.
This means that Cicis franchisees must maintain compliance with the terms of the program and the franchise agreement to continue benefiting from the reduced royalty fees. Failure to do so will result in the reinstatement of the standard royalty fee, potentially impacting the franchisee's profitability. The franchisor has sole discretion to determine whether particular obligations are "material" for purposes of determining good standing, and their decision will be final.