What is the Cicis franchisee's obligation regarding timely payments?
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.
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to the 2025 Cicis Franchise Disclosure Document, franchisees are responsible for the costs and expenses associated with purchasing products or ingredients from designated suppliers for Limited Time Offers (LTOs). Cicis has the authority to withdraw payments for these automatically shipped products from the franchisee's account via Electronic Funds Transfer (EFT) on or before the payment date specified on the supplier's invoice. This ensures that suppliers are paid promptly for the goods provided to the franchisee.
In addition to these direct product costs, Cicis franchisees must contribute 5% of their restaurant's net sales to a fund, referred to as the "Fund Contribution." This contribution is calculated and due at the same time as the royalty fee, indicating a regular and consistent payment schedule. Franchisees are also required to spend at least 1% of their restaurant's net sales on approved local marketing programs within their protected area.
Furthermore, if a Cicis restaurant is located within an area covered by a Cooperative, the franchisee must contribute to the Cooperative as required by the Cooperative's guidelines. These financial obligations underscore the importance of franchisees maintaining sufficient cash flow and adhering to the payment terms set by Cicis and its designated suppliers. Failure to meet these payment obligations could result in penalties or other consequences as outlined in the franchise agreement.