What obligation is waived upon termination of the Cicis Franchise Agreement under the Underperforming Incentive Program?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
While you are approved to participate in the Program and remain in good standing, we hereby waive your obligation to pay us a Development Fee under the Development Agreement and an Initial Franchise Fee under the Qualifying Franchise Agreements.
We reserve the right to revoke the waivers at any time you are either no longer approved to participate in the Program or cease to be in good standing, in which case, you will pay us the Development Fee and Initial Franchise Fees which, absent the waivers, are required under the Development Agreement and Qualifying Franchise Agreements, as applicable. "Good Standing" means that you and your affiliates, as applicable, are in compliance with all material obligations under the Development Agreement and all Franchise Agreements between us and you or them, whether or not executed pursuant to the Development Agreement.
You agree that we will have sole discretion to determine whether particular obligations are "material" for purposes of determining good standing, and our decision will be final.
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to the 2025 Cicis Franchise Disclosure Document, if a franchisee is approved to participate in the Underperforming Incentive Program and remains in good standing, Cicis will waive the obligation to pay the Development Fee under the Development Agreement and the Initial Franchise Fee under the Qualifying Franchise Agreements. Good standing is defined as compliance with all material obligations under the Development Agreement and all Franchise Agreements between Cicis and the franchisee or their affiliates. Cicis retains the sole discretion to determine whether particular obligations are "material," and their decision is final.
However, Cicis reserves the right to revoke these waivers at any time if the franchisee is no longer approved to participate in the program or ceases to be in good standing. If the waivers are revoked, the franchisee will be required to pay the Development Fee and Initial Franchise Fees that were initially waived.
This waiver of fees under the Underperforming Incentive Program can significantly reduce the initial investment required to open a Cicis franchise for eligible franchisees. However, franchisees must maintain good standing to retain the waiver, and Cicis has the final say in determining what constitutes a material obligation. Prospective franchisees should carefully review the terms of the Underperforming Incentive Program Addendum and the definition of "Good Standing" to understand their obligations and the potential risks of losing the waiver.