What happens if a Cicis franchisee ceases to be in good standing after receiving a reduction in the Initial Franchise Fee?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
te, or a third party unaffiliated with you and was permanently closed or has been temporarily closed for an extensive period. The franchise agreement that previously governed the owner's operation of the Restaurant has been terminated. You and we have entered into the Franchise Agreement to govern your ownership and operation of the previously closed Restaurant from and after the Effective Date.
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- Reopening of the Restaurant. You agree that you will, at your expense, take the actions described on Attachment A hereto to remodel and refresh the Restaurant (the "Refresh Obligations") prior to reopening the Restaurant, and you will complete the Refresh Obligations and reopen the Restaurant for regular business in accordance with the Franchise Agreement by no later than the Reopening D
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, if a franchisee and their affiliates cease to be in good standing after receiving a reduction in the Initial Franchise Fee, Cicis reserves the right to revoke the reduction. In such a case, the franchisee will be required to pay the remaining balance of the full Initial Franchise Fee, which was initially reduced.
The FDD defines "Good Standing" as compliance with all material obligations under the Franchise Agreement and any other agreements between the franchisee and Cicis. Cicis retains sole discretion to determine whether specific obligations are considered "material," and their decision is final. This means that Cicis has the authority to decide if a franchisee's non-compliance is significant enough to revoke the Initial Franchise Fee reduction.
For a prospective Cicis franchisee, this implies that maintaining good standing is crucial to retain the benefit of a reduced Initial Franchise Fee. Failure to comply with the Franchise Agreement or other related agreements could result in the franchisee having to pay the full Initial Franchise Fee, potentially impacting their financial obligations to Cicis. Franchisees should ensure they understand and adhere to all requirements to avoid losing the reduction.
This provision protects Cicis by ensuring franchisees remain compliant with their obligations. It also places a significant responsibility on the franchisee to maintain good standing, as the financial consequences of losing that status could be substantial. Franchisees should carefully review all agreements and seek clarification on any obligations to ensure they remain in good standing and avoid any unexpected financial burdens.