If the waiver of the Initial Franchise Fee is revoked for a Cicis franchisee, when must the fee be paid?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
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- 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 the 2025 Cicis Franchise Disclosure Document, the timing of the initial franchise fee payment depends on the specific incentive program the franchisee participates in. For veterans participating in the Veterans Incentive Program, Cicis waives the initial franchise fee while the franchisee is approved for the program and remains in good standing. However, Cicis reserves the right to revoke this waiver if the franchisee is no longer approved or ceases to be in good standing. In such cases, the franchisee must pay the initial franchise fee that was initially waived under the Franchise Agreement. The FDD does not specify a particular timeframe for payment upon revocation, only that it becomes immediately due.
Similarly, for franchisees participating in the Underperforming Incentive Program, Cicis also waives the Development Fee and Initial Franchise Fee while the franchisee is approved to participate in the Program and remains in good standing. Cicis retains the right to revoke these waivers if the franchisee is no longer approved or ceases to be in good standing. If the waiver is revoked, the franchisee is obligated to pay the Development Fee and Initial Franchise Fees that were initially waived under the Development Agreement and Qualifying Franchise Agreements. Again, the FDD does not specify a particular timeframe for payment upon revocation, only that it becomes immediately due.
For franchisees reopening a previously closed Cicis restaurant, the initial franchise fee is reduced to $5,000, provided the franchisee and their affiliates remain in good standing. Cicis reserves the right to revoke this reduction if the franchisee ceases to be in good standing, in which case the franchisee must pay the balance of the full Initial Franchise Fee required under the Franchise Agreement. The FDD does not specify a particular timeframe for payment upon revocation, only that it becomes immediately due.
Prospective Cicis franchisees should clarify with Cicis the specific payment terms and deadlines that would apply if a waiver or reduction of the initial franchise fee is revoked. Understanding these obligations is crucial for managing the financial aspects of the franchise.