What ongoing services are included in Cicis franchise agreements?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
ons are substantially affected by economic conditions, which can vary significantly by market and can be impacted by consumer disposable income levels and spending habits.
Nature of products and services:
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
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 agreements include 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 dependent on and interrelated with the franchise right, and are therefore accounted for as a single performance obligation. This means that Cicis views providing daily access to its symbolic intellectual property over the franchise term as a series of distinct services that form a single, continuous obligation.
For a prospective franchisee, this means that the franchise fee covers not only the initial right to operate a Cicis restaurant but also the ongoing support and resources provided by the company. This includes brand-related intellectual property, marketing, training, and operational oversight, which are all designed to help the franchisee maintain Cicis's standards and brand identity. The franchisee benefits from Cicis's continuous involvement in maintaining and improving the brand, menu, and operational practices.