Effective January 1, 2024, how was the management services agreement amended to calculate management fees for Cicis?

According to Cicis's 2025 Franchise Disclosure Document, the management services agreement was amended effective January 1, 2024. The amendment changed the calculation of management fees to 60% of other net revenue. This indicates a shift in how Cicis compensates its affiliate for management services.

Prior to this amendment, the management fee calculation, effective January 1, 2023, was based on 1% of marketing fund contributions and 50% of other net revenue. The change to a flat 60% of other net revenue could impact the overall expense Cicis incurs for these services, as well as the profitability of the affiliate providing the services.

For prospective franchisees, this change highlights the related-party transactions within the Cicis franchise system and the potential for these arrangements to evolve. It's important to understand what "other net revenue" encompasses and how this change might affect the financial performance of both Cicis and its affiliates. Franchisees should seek clarification from Cicis regarding the specific components of "other net revenue" and the rationale behind this amendment to fully assess its implications.