If the waiver of the Initial Franchise Fee is revoked, what must a Cicis franchisee do?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
-
- Waiver of Initial Franchise Fee. We hereby waive your obligation to pay us an Initial Franchise Fee while you are approved to participate in the Program and remain in good standing. We reserve the right to revoke the waiver 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 Initial Franchise Fee which, absent the waiver, is required under the Franchise Agreement. "Good Standing" means that you are in compliance with all material obligations under the Franchise Agreement, and you and your affiliates are in compliance with all material obligations under any other agreements between us and you or them. 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.
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, if a franchisee's Initial Franchise Fee waiver is revoked, the franchisee must pay the Initial Franchise Fee that was initially waived. This situation arises if the franchisee is no longer approved to participate in the Veterans Incentive Program or ceases to be in good standing. Good standing is defined as compliance with all material obligations under the Franchise Agreement and any other agreements between Cicis and the franchisee or their affiliates. Cicis retains sole discretion in determining whether obligations are considered "material," and their decision is final.
For a prospective Cicis franchisee, this means that maintaining compliance with all agreements is crucial to retain the Initial Franchise Fee waiver. Failure to meet obligations, even if seemingly minor, could lead to the waiver's revocation and the requirement to pay the full Initial Franchise Fee. The franchisee should, therefore, ensure a clear understanding of all obligations and maintain meticulous records to demonstrate compliance.
This clause highlights the importance of a strong working relationship between Cicis and its franchisees. While the waiver provides a financial benefit, it is contingent upon the franchisee's adherence to all agreements. Franchisees should seek clarification from Cicis on any obligations that are unclear and proactively address any potential compliance issues to avoid the risk of losing the waiver. This level of scrutiny is not uncommon in franchising, as franchisors need to protect their brand and ensure consistent standards across all locations.