What is the effect of the Cicis Reopen Incentive Program Addendum on the standard Royalty Fees outlined in the Franchise Agreement?
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 Reopen Incentive Program Addendum modifies the standard royalty fees under specific conditions. If a franchisee participates in the Reopen Incentive Program and remains in good standing, the royalty fee is reduced for a defined period. Specifically, for net sales generated through the first anniversary of the restaurant's opening date, the royalty fee is calculated at 3% of those net sales.
However, this reduced royalty fee is contingent on the franchisee's continued participation in the program and maintenance of good standing. If, at any point before the first anniversary of the opening date, the franchisee ceases to be approved for the program or falls out of good standing, the royalty fee reduction becomes void immediately and without notice. In such cases, the royalty fee reverts to the rate specified in Section 4.C of the Franchise Agreement, without regard to the Reopen Incentive Program Addendum.
For a prospective Cicis franchisee, this means that the Reopen Incentive Program offers a potential short-term reduction in royalty fees to help boost profitability during the initial period after reopening a restaurant. However, it's crucial to adhere to all program requirements and maintain good standing to continue receiving the reduced rate. Failure to do so could result in an immediate increase in royalty fees, impacting the restaurant's financial performance.