What happens if payments to Cicis are delinquent or understated?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
C. Audits. We or our designee have the right at all reasonable times to review, audit, examine, and copy your books and records as we may require without cause or prior notice you. If any payments required to be made to us under this Agreement are delinquent, or if an inspection reveals that such payments have been understated in any way, then you will immediately pay us the amount overdue or understated upon demand with interest determined in accordance with the provisions of Section 4.G. If we decided to conduct an audit because of your failure to provide any records or reports you are required to provide us or if an audit discloses an understatement in any way of 3% or more, then you will also reimburse us for all costs and expenses connected with the audit (including reasonable accounting and attorneys' fees). These remedies will be in addition to any other remedies we may have at Law or in equity.
- D. No Waiver. You understand and agree that our receipt or acceptance of any of the statements you furnish or payments you make to us will not preclude us from questioning the correctness thereof at any time and, in the event that any inconsistencies or mistakes are discovered in such statements or payments, you will immediately rectify such inconsistencies or mistakes and make the appropriate payment.
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, if any payments required to be made to Cicis are delinquent, the franchisee will immediately pay the amount overdue with interest determined in accordance with the provisions of Section 4.G. Section 4.G states that any payment or report not actually received by Cicis on or before such date will be deemed overdue. All unpaid obligations under the Franchise Agreement will bear interest from the date due until paid at a rate of five percent (5%) per month or the maximum rate allowed by applicable law, whichever is less.
Additionally, if an inspection reveals that payments have been understated in any way, the franchisee will immediately pay Cicis the amount understated upon demand with interest. If Cicis decides to conduct an audit because the franchisee failed to provide required records or reports, or if an audit discloses an understatement of 3% or more, the franchisee will reimburse Cicis for all costs and expenses connected with the audit, including reasonable accounting and attorneys' fees. These remedies are in addition to any other remedies Cicis may have at law or in equity.
Cicis's acceptance of statements or payments from the franchisee does not prevent Cicis from questioning their correctness at any time. If inconsistencies or mistakes are discovered in such statements or payments, the franchisee must immediately rectify them and make the appropriate payment. This means Cicis retains the right to audit financial records and pursue discrepancies even after initial acceptance of payments, placing the onus on the franchisee to maintain accurate and transparent accounting practices. Franchisees should ensure meticulous record-keeping to avoid potential disputes and financial penalties.