Can Smile LLC revoke the reduced Initial Franchise Fee for a Cicis franchise at any time?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
eements, at least five (5) Cicis Pizza Restaurants. In light of your acquisition of the Development Rights and your agreement to remain in good standing (as defined below), we have agreed to allow you to participate in our Development Incentive Program (the "Program") with respect to the Development Agreement and Franchise Agreements that you or your affiliates execute pursuant to the Development Agreement from and after the Effective Date of this Addendum (the "Qualifying Franchise Agreements"). We may revoke your participation in the Program if, at any time, we determine that you no longer qualify to participate.
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- Reduction of Development and Initial Franchise Fees. Section 3 of the Development 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 Development Fee will be reduced to $10,000 times the total number of Restaurants to be developed hereunder, and the Initial Franchise Fee under each Qualifying Franchise Agreement shall be reduced to $10,000. We reserve the right to revoke the foregoing reductions 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 Development Fee and Initial Franchise Fees which, absent the foregoing reductions, are required under the Development Agreement and Qualifying Franchise Agreements, as applicable. "Good Standing" means that you and your affiliates, as applicable, are in compliance with all material obligations under the Development Agreement (including the Development Schedule), all Franchise Agreements between us and you or them, whether or not executed pursuant to the Development Agreement, and all other agreements between us and you or your affiliates.
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, Smile LLC can revoke the reduced Initial Franchise Fee under certain conditions. For franchisees participating in the Development Incentive Program, the initial franchise fee may be reduced to $10,000, but Smile LLC reserves the right to revoke this reduction if the franchisee is no longer approved to participate in the program or ceases to be in good standing. If the reduction is revoked, the franchisee must pay the balance of the full Initial Franchise Fee as required under the Franchise Agreement. Good standing is defined as compliance with all material obligations under the Franchise Agreement, the Development Agreement, and all other agreements between Cicis and the franchisee or their affiliates.
For franchisees reopening a previously closed Cicis restaurant, the initial franchise fee may be reduced to $5,000, but Smile LLC reserves the right to revoke this reduction if the franchisee ceases to be in good standing. Again, if revoked, the franchisee must pay the remaining balance of the full Initial Franchise Fee. Good standing in this context means compliance with all material obligations under the Franchise Agreement and all other agreements between Cicis and the franchisee or their affiliates.
In both scenarios, Cicis retains sole discretion to determine whether particular obligations are considered "material" for the purpose of determining good standing, and their decision is final. This gives Cicis significant control over whether a franchisee maintains eligibility for the reduced initial franchise fee. Prospective franchisees should carefully review all agreements and ensure they understand the requirements for maintaining good standing to avoid potential revocation of the fee reduction.