What happens if a Cicis franchisee is no longer approved for the Veteran's Incentive Program?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
TIVE PROGRAM ADDENDUM**
(Area Development Agreement)
VETERAN'S INCENTIVE PROGRAM ADDENDUM
(Area Development Agreement)
On Smile LLC ("we") and the "Developer" identified below ("you" and, together with us, the "Parties") execute this Veteran's Incentive Program Addendum (the "Addendum") to supplement and amend that certain Area Development Agreement they have executed immediately prior to the execution of this Addendum (as it might have otherwise been amended, the "Development Agreement"). The "Effective Date" of this Addendum is the Effective Date of the Development Agreement. Capitalized terms used but not defined in this Addendum have the meanings given them in the Development Agreement. For valuable consideration, receipt and sufficiency of which are acknowledged, the Parties agree as follows:
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- Representations Regarding Veteran Status. You have asked to participate in our Veterans Incentive Program (the "Program") and, in support of your request, have provided us with information, whether as part of the Application Materials or separately (the "Supporting Information"), to confirm your qualifications to participate in the Program. You represent and warrant to us that the Supporting Information is true and correct and that you satisfy all of our requirements for participation in the Program. In reliance on the foregoing, we approve your participation in the Program with respect to Franchise Agreements that you or your affiliates execute pursuant to the Development Agreement from and after the Effective Date of this Addendum (the "Qualifying Franchise Agreements"). You must promptly notify us, in writing, if any of the Supporting Information changes or ceases to be true and correct. We may revoke your participation in the Program if, at any time, we determine that you no longer qualify for participation.
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- Waiver of Development Fee. While you are approved to participate in the Program and remain in good standing, we hereby waive your obligation to pay us a Development Fee under the Development Agreement and an Initial Franchise Fee under the Qualifying Franchise Agreements. We reserve the right to revoke the waivers at any time you are either no longer approved to participate in the Program or cease to be in good standing, in which case, you will pay us the Development Fee and Initial Franchise Fees which, absent the waivers, are required under the Development Agreement and Qualifying Franchise Agreements, as applicable. "Good Standing" means that you and your affiliates, as applicable, are in compliance with all material obligations under the Development Agreement and all Franchise Agreements between us and you or them, whether or not executed pursuant to the Development Agreement. You agree that we will have sole discretion to determine whether particular obligations are "material" for purposes of determining good standing, and our decision will be final.
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- Amendment of Qualifying Franchise Agreements. As long as you are approved to participate in the Program (as we determine in our sole discretion), as each Qualifying Franchise Agreement is executed, we and you or your affiliate executing the agreement will also execute an amendment to the agreement in the form attached as Attachment A hereto.
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- Construction; Execution. This Addendum forms an integral part of and is incorporated into the Development Agreement and represents the sole agreement between the Parties with respect to the matters set forth herein.
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, if a franchisee is no longer approved to participate in the Veteran's Incentive Program or ceases to be in good standing, Cicis reserves the right to revoke the waiver of the initial franchise fee. In such a case, the franchisee will be required to pay the initial franchise fee, which would have otherwise been waived under the program. Good standing is defined 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 particular obligations are "material" for determining good standing, and their decision is final.
For franchisees who have signed an Area Development Agreement, Cicis may revoke participation in the Veteran's Incentive Program if the franchisee no longer qualifies. If participation is revoked, Cicis reserves the right to revoke the waivers, and the franchisee will be responsible for paying the Development Fee and Initial Franchise Fees that were initially waived. Good standing in this context means compliance with all material obligations under the Development Agreement and all Franchise Agreements between Cicis and the franchisee. Cicis has the sole discretion to determine what constitutes a material obligation, and their decision is final.
Additionally, if a franchisee participating in the Veteran's Incentive Program has a modified royalty fee schedule and ceases to be approved for the program or is no longer in good standing before the first anniversary of the restaurant's opening date, the royalty fee reduction will become null and void without notice. The royalty fee will then be calculated as described in Section 4.C of the Franchise Agreement, without regard to the incentive program.
In practical terms, this means that a Cicis franchisee must maintain their eligibility for the Veteran's Incentive Program and remain in good standing to continue receiving the benefits, such as the waiver of fees and reduced royalty fees. Failure to do so can result in the loss of these incentives and the imposition of significant financial obligations. Prospective franchisees should carefully review the requirements for the Veteran's Incentive Program and ensure they can meet and maintain these requirements throughout the term of their franchise agreement.