What do 'Royalty Expenses' represent for Cicis franchisees?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
- "Royalty Expenses" means the aggregate amount of royalty paid by the franchisee.
| Financial Metrics | Average Amount | Average Percentage |
|---|---|---|
| Fee Based Net Sales (2) | $1,327,963 | 94.6% |
| Royalty Expenses (5) | $59,367 | 4.5% |
| Financial Metrics | Average Amount | Average Percentage |
| ------------------------------------ | ---------------- | -------------------- |
| (5) | $4,947 | 4.5% |
| Royalty Expenses |
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 53–58)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, 'Royalty Expenses' represent the total amount of royalty fees paid by a franchisee. The document provides financial performance representations based on data from 240 franchised Cicis Buffet Restaurants during 2024. These restaurants form what the FDD refers to as the 'Data Set'.
In the provided data, the average annual royalty expenses for Cicis restaurants in the Data Set were $59,367, which represents 4.5% of Fee Based Net Sales. On a monthly basis, the average royalty expenses were $4,947, also representing 4.5% of Fee Based Net Sales. It is important to note that some franchisees in the Data Set were subject to older franchise agreements with lower royalty rates. To account for these differences, Cicis included a 'Royalty Adjustment' to reflect the royalty rate under the current Franchise Agreement (5%).
Prospective franchisees should understand that the royalty expenses are a significant ongoing cost. The FDD also mentions that Cicis does not require franchisees to pay royalties on Game Room Sales. The financial performance data provided is based on historical results, and Cicis explicitly states that individual results may vary, and there is no assurance that a franchisee will earn as much as the averages presented.