How much did Cicis expense related to the agreement for management services in 2024?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
st in the trademarks of the CiCi's Pizza Concept. The agreement grants the Company an exclusive, non-transferable, non-assignable, royaltyfree license to use and sublicense the use of the trademarks and other intellectual property.
The Company entered into an agreement where an affiliate will provide management services for a fee, plus out of pocket expenses as incurred. Effective January 1, 2024, the fee is calculated at 1% of marketing fund contributions and 60% of other net revenue. The Company expensed $ 8,765,712 and $7,112,185 related to this agreement for the years ended December 31, 2024 and 2023, respectively. The management services fees are included in other general and administrative expenses on the com
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 58–64)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, the company expensed $8,765,712 related to the management services agreement for the year ended December 31, 2024. This expense is included within other general and administrative expenses on the combined statements of income. The agreement involves an affiliate providing management services for a fee, plus out-of-pocket expenses.
Effective January 1, 2024, the method for calculating management fees was amended to be 60% of other net revenue. This change in calculation likely contributed to the difference in expenses between 2023 and 2024. Additionally, at the end of 2024, Cicis had a payable to an affiliate for these services in the amount of $0, whereas in 2023, the payable was $583,611.
For a prospective franchisee, this indicates that Cicis engages in related-party transactions for management services, and the expenses associated with these services can be substantial. The fees are subject to change based on the terms of the agreement with the affiliate. It's important for franchisees to understand how these management fees are calculated and how they might impact the overall financial performance of Cicis.