Can Cicis revoke permission to exclude items from Net Sales?

According to Cicis's 2025 Franchise Disclosure Document, Cicis has the authority to revoke permission to exclude certain items from net sales. Net Sales are defined as all sales, revenues, charges, and receipts from the Cicis restaurant, including revenue from video game machines, whether paid via cash, credit, or other methods. Net Sales also include insurance proceeds received to replace lost revenue due to business interruption. Exclusions from Net Sales include sales tax, customer refunds, and vending machine sales.

Cicis retains the discretion to authorize additional exclusions from Net Sales. However, Cicis can revoke or withdraw any such permission at any time. This means that while Cicis may initially allow a franchisee to exclude certain items from their Net Sales calculation, they reserve the right to change this policy.

This policy could impact a franchisee's royalty fees, which are calculated as a percentage of Net Sales. The standard royalty fee is 5% of Net Sales for a Cicis Buffet Restaurant and 6% for a Cicis To Go Restaurant, although this can be reduced under certain incentive programs. If Cicis revokes permission to exclude certain items, the franchisee's Net Sales would increase, potentially leading to higher royalty payments. Franchisees should be aware of this possibility and factor it into their financial planning.