How is the Management Fee calculated for a Cicis franchise?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
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| Type of Fee(1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Indemnification | Amount of damages suffered | On demand | You must indemnify, defend, and hold us, our affiliates, and our and affiliates' respective owners, directors, managers, officers, employees, agents, successors, and assignees harmless against all third party claims arising from the development or operation of your Restaurant (or by your employees, or others that arise from your employment practices). |
| Audit Fee | Cost of audit | When billed | Payable only if we find, after an audit, that you have understated any amount owed to us by more than 3% or if we decide to conduct an audit because of your failure to timely submit the required records or reports. |
| Insurance Fee | $250, plus actual cost of obtaining the insurance coverage | When billed | If you fail to maintain the required insurance, we have the right, but not the obligation, to obtain it for you. If we do, we will charge you a fee plus the cost of the insurance. |
| Insufficient Funds Fee | $100 per occurrence | On demand | If a payment does not clear your bank, we charge a service fee of $25, which includes the bank charge. We may draft your account for this fee. |
| Enforcement Costs | Costs awarded by the applicable court | As incurred | Payable only if you do not comply with the Franchise Agreement or Area Development Agreement, and we are the prevailing party in any relevant litigation. |
| Post-Termination / Post-Expiration De-identification Costs | Actual cost incurred by us | As incurred | If you fail to de-identify after the franchise terminates or expires, we may make the necessary changes at your expense. |
| Management Fee | 10% of Net Sales, plus costs and expenses | As incurred | If we assume management of your Restaurant upon your or your Manager Owner's death, we may charge you the Management Fee, plus the direct out-of-pocket costs and expenses incurred in the operation |
Source: Item 6 — OTHER FEES (FDD pages 14–21)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, a Management Fee may be charged if Cicis assumes management of a restaurant due to the death of the franchisee or their Managing Owner. This fee is calculated as 10% of Net Sales, plus any direct out-of-pocket costs and expenses incurred in operating the restaurant.
This fee is not a standard, ongoing fee like the Royalty Fee, but rather a conditional fee that is only applied if Cicis steps in to manage the restaurant. The 'Net Sales' used in the calculation refers to the gross revenue of the Cicis restaurant, less certain deductions such as discounts and sales taxes.
For a prospective franchisee, it's important to understand the circumstances under which this Management Fee could be applied. While it is triggered by an unfortunate event (death), it is designed to cover Cicis's costs and compensate them for their management services during a transition period. Franchisees should consider this potential cost when making financial plans and ensure they have addressed succession planning for their business.
It is also important to note that the Management Fee is in addition to the direct out-of-pocket costs and expenses incurred in the operation of the Restaurant. These costs could include things like payroll, inventory, and utilities. Franchisees should ask Cicis for a detailed list of what these costs might include.