How is the fee calculated for the affiliate providing management services to Cicis, effective January 1, 2024?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
st in the trademarks of the CiCi's Pizza Concept. The agreement grants the Company an exclusive, non-transferable, non-assignable, royaltyfree license to use and sublicense the use of the trademarks and other intellectual property.
The Company entered into an agreement where an affiliate will provide management services for a fee, plus out of pocket expenses as incurred. Effective January 1, 2024, the fee is calculated at 1% of marketing fund contributions and 60% of other net revenue. The Company expensed $ 8,765,712 and $7,112,185 related to this agreement for the years ended December 31, 2024 and 2023, respectively. The management services fees are included in other general and administrative expenses on the com
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 58–64)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, the company has an agreement with an affiliate to provide management services. In addition to out-of-pocket expenses, the affiliate receives a fee for these services.
Effective January 1, 2024, the method for calculating this management fee was amended. The fee is now calculated as 1% of marketing fund contributions and 60% of other net revenue.
In 2024 and 2023, Cicis expensed $8,765,712 and $7,112,185, respectively, related to this agreement. At the end of 2024, the payable to the affiliate for these services was $0, while it was $583,611 at the end of 2023. These management services fees are included in other general and administrative expenses on the combined statements of income.