What determines the amount of the Enforcement Costs for a Cicis franchise?

According to Cicis's 2025 Franchise Disclosure Document, the Enforcement Costs are determined by the costs awarded by the applicable court. These costs are payable by the franchisee only if they do not comply with the Franchise Agreement or Area Development Agreement, and Cicis prevails in any relevant litigation. This means that the amount a franchisee might have to pay in enforcement costs is not a fixed fee but rather depends on the specific legal circumstances and the court's decision in a dispute between Cicis and the franchisee.

This arrangement is fairly standard in franchising, where franchisees are expected to adhere to the terms of their agreements. If a franchisee breaches the agreement, they may be responsible for Cicis's legal costs if Cicis wins the case. The franchisee's potential financial exposure is thus tied to their compliance with the franchise agreement and the specifics of any legal proceedings.

Prospective Cicis franchisees should carefully review the Franchise Agreement and Area Development Agreement to understand their obligations and avoid potential breaches that could lead to litigation and the associated enforcement costs. Understanding these terms is crucial for managing the financial risks associated with operating a Cicis franchise.