What is the non-compliance fee that Cicis may charge for each violation of the Franchise Agreement?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
Sales report, then we will have the right to assess the data collection fee immediately without notice or an opportunity to cure. Our assessment of the data collection fee will be in addition to our other rights and remedies.
- (3) The Royalty Fee we charge under this Agreement was determined based on the assumption that you will comply with your obligations hereunder. If you do not comply with your obligations, we will incur additional costs and expenses. Therefore, if we determine that you are not in compliance with your obligations under this Agreement, we may charge you a non-compliance fee of $250 for each violation thereof, and your Royalty Fee will be increased by one (1) percentage point until we determine
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, if Cicis determines that a franchisee is not complying with their obligations under the Franchise Agreement, Cicis may charge a non-compliance fee of $250 for each violation. In addition to this fee, the franchisee's Royalty Fee will be increased by one percentage point until Cicis determines that all deficiencies have been corrected and the franchisee is compliant with all terms of the agreement. At that point, the Royalty Fee will revert to the original rate.
It's important to note that payment of the non-compliance fee does not automatically correct the issue that triggered the fee. The franchisee must still take steps to fix the underlying problem. The purpose of the non-compliance fee is to compensate Cicis for expenses or losses incurred as a result of the franchisee's non-compliance, and it is not considered a penalty or a complete measure of all damages Cicis might suffer.
This fee is in addition to any other rights and remedies Cicis has available under the terms of the Franchise Agreement. This means that Cicis could pursue other legal or contractual options to address the non-compliance, even after the fee has been assessed. Franchisees should, therefore, prioritize compliance with the Franchise Agreement to avoid these fees and potential further action from Cicis.