What section of the Cicis Franchise Agreement is supplemented and amended by the Development Incentive Program Addendum?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
ffective as of the Effective Date.
| Current assets: | |||
|---|---|---|---|
| Cash and cash equivalents | $ 1,854,735 | $ 2,931,372 | |
| Cash and cash equivalents—marketing fund, restricted | 434,199 | 771,794 | |
| Accounts receivable, net: | |||
| Trade receivables | 290,921 | 325,874 | |
| Marketing fund, restricted | 2,395,119 | 2,537,488 | |
| Related party receivable | 695,717 | 79,530 | |
| Prepaid expenses and other current assets | 859,866 | 228,561 | |
| Total current assets | 6,530,557 | 6,874,619 | |
| Other receivables | 12,638 | 58,761 | |
| Website, net | 150,333 | 194,333 | |
| Intangible assets, net | 98,719 | 109,488 | |
| Goodwill, net | 14,678 | 17,058 | |
| Total noncurrent assets | 276,368 | 379,640 | |
| Total assets | $ 6,806,925 | $ 7,254,259 |
ATTACHMENT A
DEVELOPMENT INCENTIVE PROGRAM ADDENDUM (Franchise Agreement)
DEVELOPMENT INCENTIVE PROGRAM ADDENDUM
(Franchise Agreement)
On Smile LLC ("we") and the "Franchisee" identified below ("you" and, together with us, the "Parties") execute this Development Incentive Program Addendum (the "Addendum") to supplement and amend that certain Franchise Agreement they have executed immediately prior to the execution of this Addendum (as it might have otherwise been amended, the "Franchise Agreement"). The Franchise Agreement was executed pursuant to a Development Agreement between us and you or your affiliate (the "Development Agreement"). The "Effective Date" of this Addendum is the same as the Effective Date of the Franchise Agreement. Capitalized terms used but not defined in this Addendum have the meanings given them in the Franchise Agreement. For valuable consideration, receipt and sufficiency of which are acknowledged, the Parties agree as follows:
- Reduction of Initial Franchise Fee. Section 4.A of the Franchise Agreement is supplemented and amended by adding the following to the end of the Section:
While you are approved to participate in the Program and provided you and your affiliates remain in good standing, we agree that the Initial Franchise Fee shall be reduced to $10,000. We reserve the right to revoke the foregoing reduction at any time you are no longer approved to participate in the Program or you cease to be in good standing, in which case, you will pay us the balance of the full Initial Franchise Fee which, absent the foregoing reduction, is required under the Franchise Agreement. "Good Standing" means that you and your affiliates, as applicable, are in compliance with all material obligations under this Agreement, the Development Agreement (including the Development Schedule thereunder), and all other agreements between us and you or them, whether or not executed pursuant to the Development Agreement. 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.
- Modification of Royalty Fees.
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, the Development Incentive Program Addendum supplements and amends specific sections of the Franchise Agreement.
Specifically, for franchisees participating in the Development Incentive Program, Section 4.A of the Franchise Agreement, which likely pertains to the initial franchise fee, is supplemented and amended. If the franchisee remains approved in the program and in good standing, the initial franchise fee is reduced to $10,000. However, Cicis retains the right to revoke this reduction if the franchisee is no longer approved or ceases to be in good standing, at which point the franchisee will be required to pay the remaining balance of the full initial franchise fee as outlined in the Franchise Agreement.
Additionally, Section 4.C of the Franchise Agreement, concerning royalty fees, is also supplemented and amended by the Development Incentive Program Addendum. For the first year after the restaurant's opening date, the royalty fee is calculated at 3% of net sales, provided the franchisee remains in the program and in good standing. Similar to the initial franchise fee reduction, Cicis can revoke this royalty fee reduction if the franchisee's status changes, reverting the royalty fee calculation to the standard terms described in Section 4.C of the Franchise Agreement.