Does Cicis require franchisees to participate in any purchasing or distribution cooperative as of the date of the Disclosure Document?

According to Cicis's 2025 Franchise Disclosure Document, franchisees are not required to participate in any purchasing or distribution cooperative as of the date of the document. However, Cicis maintains strict control over the supply chain, mandating that franchisees purchase between 90% to 95% of the total costs incurred in establishing and operating their Cicis restaurant from approved or designated suppliers.

Cicis or its affiliates may also profit from franchisee purchases from approved or designated suppliers through rebates, fees, commissions, or reimbursements. During the 2024 fiscal year, Cicis received rebates amounting to $9,752,184 from designated suppliers, representing 22.92% of its total revenue of $42,546,700 for that fiscal year. Additionally, JMC, an affiliate of Cicis, received $108,660,523 from the sale or lease of products or services to franchisees.

While franchisees are not obligated to join a purchasing cooperative, they must adhere to Cicis's System Standards and purchase Operating Assets, including food, beverages, equipment, and supplies, only from approved or designated suppliers. Cicis retains the right to approve or disapprove suppliers based on whether they meet the company's standards for reliability. Cicis can also designate itself, its affiliate, or a third party as the exclusive source for any particular item. This system ensures uniformity and quality across all Cicis restaurants but also limits the franchisee's autonomy in sourcing products and services.