Does Cicis have sole discretion to determine whether particular obligations are 'material' for purposes of determining good standing in the Veterans Incentive Program?

According to Cicis's 2025 Franchise Disclosure Document, Cicis retains sole discretion in determining whether certain obligations are considered 'material' when assessing a franchisee's good standing within the Veterans Incentive Program. This means Cicis has the final say on which obligations are critical for a franchisee to remain in good standing and continue to receive the benefits of the program. The decision made by Cicis is final and not subject to appeal.

This discretion impacts franchisees participating in the Veterans Incentive Program because their continued eligibility for benefits, such as waivers on the Initial Franchise Fee or Development Fee, hinges on maintaining 'good standing.' If Cicis deems a franchisee to have failed to meet a 'material' obligation, the franchisee risks losing these incentives. For instance, a franchisee might have their Initial Franchise Fee waiver revoked and be required to pay the full fee, which could be a significant financial burden.

This level of franchisor control is not uncommon, as franchise agreements typically grant the franchisor authority to ensure brand standards and operational consistency. However, it's crucial for prospective Cicis franchisees to fully understand the terms and conditions of the Veterans Incentive Program and to seek clarity on what Cicis considers 'material' obligations. This understanding will help them avoid potential pitfalls and maintain their good standing in the program. Franchisees should ask for specific examples of obligations considered material to ensure they can meet these requirements.