What is the relationship between the royalty fee structure for Cicis in Item 6 and the estimated initial investment costs outlined in Item 7?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition to the initial franchise fee and other initial costs, you will need additional funds to operate your Location during the start-up phase of the business.
You may also have to pay the Royalty Fee, advertising, and other related fees described in Item 6 of this Disclosure Document.
| Type of Fee(1) | Amount | Due Date | Remarks | |
|---|---|---|---|---|
| Royalty Fee | 5% of Net Sales for a Cicis Buffet Restaurant; 6% of Net Sales for a Cicis To Go Restaurant (subject to reduction for participation in current incentive programs). | The day of the week we specify (currently, Thursday) | See Notes 2, 3, 4, and 5 | |
| Additional Funds | $10,000 - | As arranged | As invoiced | Third-Party |
| (3 months) (Note 14) | $15,000 | Suppliers |
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, Item 7 outlines the estimated initial investment for opening a Cicis restaurant, while Item 6 details the ongoing fees, including royalty fees. Item 7 mentions that in addition to the initial franchise fee and other initial costs, franchisees will need additional funds to operate their location during the start-up phase, and that these funds may be used to pay the Royalty Fee described in Item 6. This indicates that the royalty fees are an ongoing expense that franchisees must factor into their operating capital, especially during the initial months of operation.
The royalty fee structure, as described in Item 6, requires franchisees to pay either 5% of Net Sales for a Cicis Buffet Restaurant or 6% of Net Sales for a Cicis To Go Restaurant. These royalty fees are due on a specified day of the week, currently Thursday. Item 7 also notes that the initial investment includes additional funds needed for the first three months of operation, and these funds should account for expenses like training, higher food and labor costs, and general working capital. The franchisee is responsible for calculating these expenses, including royalty fees, based on their market conditions.
Furthermore, Item 7 includes a table that lists 'Additional Funds (3 months)' as a separate expenditure, with an estimated range of $10,000 to $15,000. This amount is intended to cover the initial operating phase, which would include royalty fees. The document also states that the estimates provided for initial investment are based on the cost of adapting architectural plans for a Cicis Buffet Restaurant containing approximately 3,000 to 6,000 square feet or a Cicis To Go Restaurant containing approximately 1,000 to 1,500 square feet. Therefore, prospective franchisees need to consider the royalty fees outlined in Item 6 as a part of their initial financial planning and ongoing operational costs, as highlighted in Item 7.