What is the Cicis franchisee's obligation regarding payments to Cicis, its affiliates, and other suppliers?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
ingredients for such products) will be automatically shipped to you by our designated supplier within 10 days following the announcement of the LTO unless, within such 10-day period, you have placed an order for the required products (or the ingredients for such products) with our designated supplier in quantities sufficient to satisfy our requirements for the LTO. If you order less than the required amount, our designated supplier will automatically ship the balance to you. Notwithstanding anything to the contrary, you shall be responsible for cost and expenses associated with your purchase or automatic supply by our designated suppliers of the products (or the ingredients for such products) and services required by you to offer any LTO. You hereby authorize us to withdraw payment for all products automatically shipped to you by our designated suppliers on or before the payment date set forth in the supplier's invoice by EFT from your account in accordance with Section 4.H. of this Agreement.
- (2) You will comply with all requirements and specifications we establish, and use all designated vendors, for each Marketing Program.
- (3) We may, from time to time, provide you, without charge, certain marketing pieces regarding the Cicis® franchise opportunity. You must display those materials in your Restaurant in accordance with our direction.
- B. Marketing Contributions and Expenditures. In addition to your participation in the Marketing Programs as described above, you agree to the following:
- (1) You agree to contribute 5% of your Restaurant's Net Sales to the Fund (defined below) ("Fund Contribution"). The Fund Contribution is calculated in the same manner, and will be due and payable at the same time, as the Royalty Fee.
- (2) In addition to the Fund Contribution, you must spend at least 1% of your Restaurant's Net Sales on approved marketing programs for your Restaurant in the Protected Area ("Local Marketing Spend"). We describe in the Manuals from time to time certain expenditures that will not satisfy the Local Marketing Spend unless you obtain our prior written agreement as to specific proposed expenditures.
- (3) If your Restaurant is located within an area that is or becomes covered by a Cooperative (defined below), you must contribute to the Cooperative all amounts required by the Cooperative's
governing documents ("Minimum Cooperative Contribution") and any additional amounts authorized by a vote of the Cooperative's members and approved by us ("Excess Cooperative Contribution").
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to the 2025 FDD, Cicis franchisees have several payment obligations to Cicis, its affiliates, and designated suppliers. Franchisees must contribute 5% of their restaurant's net sales to the Fund, which is termed the "Fund Contribution." This contribution is calculated and due at the same time as the royalty fee. In addition to this, franchisees are required to spend at least 1% of their restaurant's net sales on approved local marketing programs within their protected area, referred to as "Local Marketing Spend."
Cicis franchisees are also responsible for the costs associated with purchasing products or ingredients from designated suppliers for any Limited Time Offers (LTOs). Cicis is authorized to withdraw payments for products automatically shipped from these designated suppliers via Electronic Funds Transfer (EFT) from the franchisee's account, with the payment date being determined by the supplier's invoice, as per Section 4.H of the agreement. Franchisees are obligated to purchase proprietary items from Cicis or a designated supplier. This includes promotional and other merchandise identifying the Cicis system, such as pre-packaged food products and Cicis-branded memorabilia, in amounts sufficient to meet customer demand.
Furthermore, Cicis franchisees may incur expenses related to training programs. While Cicis provides instructors and training materials for additional programs and seminars, they reserve the right to charge a reasonable fee for these. Franchisees are generally responsible for all expenses, including travel, lodging, meals, and wages, for themselves and their personnel in connection with any training programs, whether initial or subsequent, unless otherwise agreed in writing. If the franchise agreement is for the franchisee's third or subsequent restaurant, they may be required to reimburse Cicis for expenses incurred in providing on-site opening assistance, such as travel, lodging, and meals for the representatives providing the assistance.
Finally, franchisees must enter into and pay for all necessary license or other agreements with Cicis, its affiliates, or third parties to obtain and maintain the right to use the required software programs, including the Cicis Approved POS System. Franchisees are responsible for maintaining a secure technology infrastructure that meets Cicis's requirements and complies with PCI DSS standards to protect customer privacy and credit card information.