What is the document called that supplements and amends the Cicis Franchise Agreement under the Underperforming Incentive Program?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 23: RECEIPTS]
EXHIBIT D-4 UNDERPERFORMING INCENTIVE PROGRAM ADDENDUM
(Franchise Agreement)
UNDERPERFORMING INCENTIVE PROGRAM ADDENDUM
(Franchise Agreement)
On Smile LLC ("we") and the "Franchisee" identified below ("you" and, together with us, the "Parties") execute this Underperforming Incentive Program Addendum (the "Addendum") to supplement and amend that certain Franchise Agreement the Parties 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. 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:
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, the document that supplements and amends the Franchise Agreement under the Underperforming Incentive Program is called the "Underperforming Incentive Program Addendum". This addendum is executed by On Smile LLC and the franchisee to modify the existing Franchise Agreement. The effective date of the addendum aligns with the effective date of the original Franchise Agreement.
The Underperforming Incentive Program Addendum includes specific modifications to the Franchise Agreement, such as adjustments to royalty fees. For instance, the royalty fee may be reduced to 2% of net sales from the effective date through the day preceding the first anniversary of the effective date, then to 3% of net sales from the first to the second anniversary, and subsequently, the rate specified in the original Franchise Agreement applies. However, these modifications are contingent upon the franchisee remaining in good standing as defined in the addendum.
Furthermore, the addendum requires the franchisee to confirm the accuracy of the information provided in their application for the Underperforming Incentive Program. It also outlines conditions for reimbursement of grand opening promotion expenses, potentially up to the amount of the renewal fee paid. Cicis retains the right to determine whether submitted expenses qualify for reimbursement.
This addendum is an integral part of the Franchise Agreement, representing the complete understanding between the parties regarding the matters it addresses. The original Franchise Agreement remains in effect except as specifically modified by the addendum. The Underperforming Incentive Program Addendum provides a framework for supporting franchisees who may be facing challenges, offering potential financial relief and incentives to improve performance, subject to meeting certain conditions and maintaining good standing with Cicis.