What is the impact of the Cicis Reopen Incentive Program Addendum on the original Franchise Agreement?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2024 | 2023 | |||
|---|---|---|---|---|
| Revenue: | ||||
| Marketing fees | $ 17,505,781 | $ 17,219,322 | ||
| Franchise royalties and technology fees | 14,276,030 | 14,105,892 | ||
| Technology and support fees | 260,000 | 93,700 | ||
| Franchise fees | 72,368 | 57,395 | ||
| Incentive income from vendors | 680,337 | 758,680 | ||
| Marketing income from vendors | 9,752,184 | 9,123,662 | ||
| Total revenues | 42,546,700 | 41,358,651 | ||
| Expenses: | ||||
| Marketing general and administrative costs | 26,147,519 | 25,000,069 | ||
| Other general and administrative | 12,354,939 | 10,509,727 | ||
| Total expenses | 38,502,458 | 35,509,796 | ||
| Other income, net | 165,837 | 10,850 | ||
| Net income | $ 4,210,079 | $ 5,859,705 |
EXHIBIT D-3 REOPEN INCENTIVE PROGRAM ADDENDUM
(Franchise Agreement)
REOPEN INCENTIVE PROGRAM ADDENDUM
(Franchise Agreement)
On Smile LLC ("we"), the "Franchisee" identified below ("you"), and your owners who have guaranteed your performance under the Franchise Agreement (collectively, the "Guarantors" and, together with us and you, the "Parties") execute this Reopen Incentive Program Addendum (the "Addendum") to supplement and amend that certain Franchise Agreement identified on Attachment A hereto (as it might have previously been amended, the "Franchise Agreement"). The Effective Date of this Addendum is the date on which we sign below. Capitalized terms used but not defined in this Addendum have the meanings given them in the Franchise Agreement. For valuable consideration, receipt and sufficiency of which are acknowledged, the Parties agree as follows:
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- Restaurant History. The Restaurant identified in the Franchise Agreement was formerly operated as a Cicis Restaurant by you, your affiliate, or a third party unaffiliated with you and was permanently closed or has been temporarily closed for an extensive period. The franchise agreement that previously governed the owner's operation of the Restaurant has been terminated. You and we have entered into the Franchise Agreement to govern your ownership and operation of the previously closed Restaurant from and after the Effective Date.
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- Reopening of the Restaurant. You agree that you will, at your expense, take the actions described on Attachment A hereto to remodel and refresh the Restaurant (the "Refresh Obligations") prior to reopening the Restaurant, and you will complete the Refresh Obligations and reopen the Restaurant for regular business in accordance with the Franchise Agreement by no later than the Reopening Deadline shown on Attachment A.
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- Reduction of Initial Franchise Fee. Provided you and your affiliates remain in good standing, we agree that the Initial Franchise Fee due under the Franchise Agreement shall be reduced to $5,000. We reserve the right to revoke the foregoing reduction at any time you cease to be in good standing, in which case, you will pay us the balance of the full Initial Franchise Fee which, absent the foregoing reduction, is required under the Franchise Agreement.
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to the 2025 Cicis Franchise Disclosure Document, the Reopen Incentive Program Addendum supplements and amends the existing Franchise Agreement. This addendum is executed by Smile LLC (Cicis), the franchisee, and the guarantors to modify the original agreement. The effective date is the date Cicis signs the addendum.
Several key aspects of the Franchise Agreement are affected by this addendum. First, if a restaurant was previously a Cicis location that closed, and the previous franchise agreement was terminated, this new agreement governs the reopened restaurant. The franchisee is responsible for remodeling and refreshing the restaurant according to Attachment A of the addendum, with a deadline for reopening as specified in the attachment.
Furthermore, the addendum may reduce the initial franchise fee to $5,000, provided the franchisee remains in good standing, which Cicis has sole discretion to determine. Good standing requires compliance with all material obligations under the Franchise Agreement and other agreements. The addendum also modifies royalty fees, but the specifics of these modifications are not detailed in this excerpt. The Reopen Incentive Program Addendum becomes an integral part of the Franchise Agreement, representing the complete agreement on the matters it covers, while the rest of the original Franchise Agreement remains in effect.