What is the relationship between the Cicis franchisee and their affiliates regarding 'Good Standing' under the Reopen Incentive Program Addendum?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
We reserve the right to revoke the waiver 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 Initial Franchise Fee which, absent the waiver, is required under the Franchise Agreement. "Good Standing" means that you are in compliance with all material obligations under the Franchise Agreement, and you and your affiliates are in compliance with all material obligations under any other agreements between us and you or them. 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 Cicis's 2025 Franchise Disclosure Document, under the Reopen Incentive Program Addendum, a franchisee's "Good Standing" is contingent not only on their own compliance with the Franchise Agreement but also on the compliance of their affiliates. Specifically, "Good Standing" means that both the franchisee and their affiliates must comply with all material obligations under any agreements between them and Cicis. This includes the Franchise Agreement itself and any other agreements.
This requirement has significant implications for prospective Cicis franchisees. If a franchisee or any of their affiliates fails to meet their obligations under any agreement with Cicis, the franchisee risks losing their "Good Standing." Cicis retains sole discretion to determine whether particular obligations are "material," and their decision is final.
The loss of "Good Standing" can lead to the revocation of incentives offered under the Reopen Incentive Program Addendum. For example, Cicis can revoke a reduction of the initial franchise fee, requiring the franchisee to pay the full initial franchise fee. This interdependency between the franchisee and its affiliates creates a potential risk, as the actions of an affiliate can directly impact the franchisee's benefits and standing with Cicis.