What is the effect of the representation and warranty made by the franchisee to Cicis regarding their veteran status?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
TIVE PROGRAM ADDENDUM**
(Area Development Agreement)
VETERAN'S INCENTIVE PROGRAM ADDENDUM
(Area Development Agreement)
On Smile LLC ("we") and the "Developer" identified below ("you" and, together with us, the "Parties") execute this Veteran's Incentive Program Addendum (the "Addendum") to supplement and amend that certain Area Development Agreement they have executed immediately prior to the execution of this Addendum (as it might have otherwise been amended, the "Development Agreement"). The "Effective Date" of this Addendum is the Effective Date of the Development Agreement. Capitalized terms used but not defined in this Addendum have the meanings given them in the Development 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 Agreements that you or your affiliates execute pursuant to the Development Agreement from and after the Effective Date of this Addendum (the "Qualifying Franchise Agreements"). 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 Development Fee. While you are approved to participate in the Program and remain in good standing, we hereby waive your obligation to pay us a Development Fee under the Development Agreement and an Initial Franchise Fee under the Qualifying Franchise Agreements. We reserve the right to revoke the waivers 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 Development Fee and Initial Franchise Fees which, absent the waivers, are required under the Development Agreement and Qualifying Franchise Agreements, as applicable.
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, if a franchisee asks to participate in the Veteran's Incentive Program, they must provide information to Cicis to confirm their qualifications. The franchisee represents and warrants that this information is true, correct, and satisfies all of Cicis's requirements for the program. Cicis approves the franchisee's participation in the program based on this representation. The franchisee must promptly notify Cicis in writing if any of the provided information changes or is no longer accurate. Cicis retains the right to revoke participation in the program if the franchisee no longer qualifies.
If the franchisee is approved to participate in the Veteran's Incentive Program and remains in good standing, Cicis will waive the initial franchise fee. However, Cicis reserves the right to revoke this waiver if the franchisee is no longer approved for the program or ceases to be in good standing. In such cases, the franchisee will be required to pay the initial franchise fee as outlined in the Franchise Agreement. Good standing is defined as compliance with all material obligations under the Franchise Agreement and any other agreements between Cicis and the franchisee or their affiliates. Cicis has sole discretion in determining whether obligations are "material" for the purpose of determining good standing, and their decision is final.
Furthermore, if the franchisee remains a participant in the Veteran's Incentive Program and is in good standing, the royalty fee will be calculated at a reduced rate of 3% of net sales for the first anniversary of the restaurant's opening date. If the franchisee ceases to be approved to participate in the program or is no longer in good standing before the first anniversary, the royalty fee reduction becomes void automatically without notice, and the royalty fee will be calculated as described in Section 4.C of the Franchise Agreement, without regard to the reduced rate.