What happens if Cicis revokes the fee reductions under the Development Incentive Program?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
eements, at least five (5) Cicis Pizza Restaurants. In light of your acquisition of the Development Rights and your agreement to remain in good standing (as defined below), we have agreed to allow you to participate in our Development Incentive Program (the "Program") with respect to the Development Agreement and 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"). We may revoke your participation in the Program if, at any time, we determine that you no longer qualify to participate.
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- Reduction of Development and Initial Franchise Fees. Section 3 of the Development Agreement is supplemented and amended by adding the following to the end of the Section:
While you are approved to participate in the Program and provided you and your affiliates remain in good standing, we agree that the Development Fee will be reduced to $10,000 times the total number of Restaurants to be developed hereunder, and the Initial Franchise Fee under each Qualifying Franchise Agreement shall be reduced to $10,000. We reserve the right to revoke the foregoing reductions at any time you are no longer approved to participate in the Program or you ceas
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, if Cicis revokes the fee reductions under the Development Incentive Program, the developer or franchisee will be required to pay the full Development Fee and Initial Franchise Fees as outlined in the Development Agreement and Qualifying Franchise Agreements. This revocation can occur if the developer or their affiliates are no longer approved to participate in the program or if they cease to be in good standing, meaning they fail to comply with all material obligations under the Development Agreement, Franchise Agreements, or other agreements with Cicis. Cicis retains sole discretion in determining whether obligations are considered "material," and their decision is final.
For franchisees, if Cicis revokes the reduction of the Initial Franchise Fee under the Development Incentive Program, the franchisee will have to pay the remaining balance of the full Initial Franchise Fee, which was initially reduced to $10,000 while the franchisee was in good standing and approved to participate in the Program. Similarly, if a franchisee ceases to be approved or in good standing before the first anniversary of their restaurant's opening date, any Royalty Fee reductions will be null and void, and the Royalty Fee will revert to the standard rate as described in Section 4.C of the Franchise Agreement.
For franchisees reopening a previously closed Cicis restaurant, a similar condition applies. The initial franchise fee is reduced to $5,000, but Cicis reserves the right to revoke this reduction if the franchisee ceases to be in good standing. In such a case, the franchisee must pay the balance of the full Initial Franchise Fee as required under the Franchise Agreement. This "good standing" is determined by compliance with all material obligations under the Franchise Agreement and other agreements with Cicis, with Cicis having the final say on what constitutes a material obligation.
These stipulations highlight the importance of maintaining compliance with all agreements and obligations to retain the benefits of the Development Incentive Program. Prospective Cicis franchisees should carefully review the terms of the Development Agreement, Franchise Agreements, and any related addenda to fully understand the conditions under which these incentives can be revoked and the financial implications of such a revocation.