What is the impact on the Cicis franchisee if Smile LLC determines that a submitted expense does not qualify for reimbursement?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Reimbursement of Renewal Fee. If, in connection with your purchase and, if applicable, re-opening of the Restaurant, you conducted a grand opening promotion approved by us, we will reimburse you the expenses you incurred and paid in executing the grand opening promotion (less salaries and benefits paid to your owners or employees), up to the amount of the Renewal Fee you paid, if any, when you signed the Franchise Agreement. If you seek reimbursement under this paragraph, you must submit documentary proof of the paid expense within 30 days following the completion of your grand opening promotion. We reserve the right to determine, in our sole discretion, whether any submitted expense qualifies for reimbursement under this paragraph.
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to the 2025 Cicis Franchise Disclosure Document, if a Cicis franchisee participates in the Underperforming Incentive Program and conducts a grand opening promotion approved by Cicis, they may be eligible for reimbursement of grand opening expenses, up to the amount of the Renewal Fee paid. To receive this reimbursement, the franchisee must submit documentary proof of the paid expenses within 30 days of completing the grand opening. However, Smile LLC retains the sole discretion to determine whether any submitted expense qualifies for reimbursement.
If Smile LLC determines that a submitted expense does not qualify for reimbursement, the franchisee will not receive reimbursement for that specific expense. This means the franchisee will bear the full cost of that portion of the grand opening promotion. This could impact the franchisee's initial investment recovery and profitability, especially if a significant portion of the submitted expenses are deemed ineligible.
It is important for prospective Cicis franchisees to carefully document all grand opening expenses and ensure they align with the franchisor's guidelines for eligible reimbursements. Franchisees should seek clarification from Cicis regarding any expense items that may be questionable to minimize the risk of non-reimbursement. Understanding these conditions is crucial for managing expectations and financial planning when participating in the Underperforming Incentive Program.