What ongoing services are included in the Cicis franchise agreement?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchise agreements: The franchise agreements include: (a) the right to use the symbolic intellectual property over the term of each franchise agreement, (b) pre-opening services, such as training, and (c) ongoing services, such as management of the advertising fund contributions, development of training materials and menu items and restaurant monitoring. These promises are highly dependent upon and interrelated with the franchise right granted in the franchise agreement, so they are not considered to be individually distinct and, therefore, are accounted for as a single performance obligation. The performance obligation under the franchise agreement is the promise to provide daily access to the symbolic intellectual property over the term of each franchise agreement, which is a series of distinct services that represents a single performance obligation. Although the franchisor's underlying activities associated with the symbolic intellectual property will vary, both within a day and day-to-day, the symbolic intellectual property is accessed over time and the customer (the franchisee) simultaneously receives and consumes the benefit from the franchisor's performance of providing access to the symbolic intellectual property (including other related activities).
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 franchise agreement includes several ongoing services. These include granting the franchisee the right to use Cicis's symbolic intellectual property throughout the term of the agreement. Additionally, Cicis provides ongoing services such as managing advertising fund contributions, developing training materials and menu items, and monitoring the restaurant's operations.
These services are considered highly interdependent with the franchise right. Therefore, they are accounted for as a single performance obligation. This means that Cicis views providing daily access to its symbolic intellectual property as a series of distinct services that form a single, continuous obligation.
For a prospective franchisee, this means that the franchise agreement provides not only the right to operate under the Cicis brand but also continuous support in key areas like marketing, training, and operational oversight. The franchisee benefits from Cicis's ongoing efforts to maintain and improve the brand's image, develop new menu items, and ensure consistent quality across all locations. This ongoing support is a crucial aspect of the franchise relationship, helping franchisees to effectively manage and grow their businesses under the Cicis brand.