What specific actions constitute 'substantially and timely complied' with the terms and conditions for a Cicis franchisee to be in Good Standing?

According to Cicis's 2025 Franchise Disclosure Document, 'Good Standing' for a franchisee is defined in several contexts, primarily relating to compliance with agreements and financial obligations. Generally, a franchisee is considered in 'Good Standing' if they, their owners, and their affiliates are not in default of the Franchise Agreement or any other agreement with Cicis or its affiliates. This includes substantially and timely complying with all terms and conditions of these agreements, such as the timely satisfaction of all monetary obligations owed to Cicis or its affiliates.

Specifically, in the context of reopening a previously closed Cicis restaurant, 'Good Standing' means compliance with all material obligations under the Franchise Agreement and all other agreements between the franchisee and Cicis. Cicis retains sole discretion to determine whether particular obligations are 'material' for the purpose of determining good standing, and their decision is final. This discretion extends to situations where Cicis may waive certain fees, such as the Development Fee or Initial Franchise Fee, while the franchisee remains in 'Good Standing' and participates in specific programs.

It's important to note that failure to comply with obligations can lead to a loss of 'Good Standing' and subsequent revocation of benefits, such as fee reductions. Furthermore, Cicis can take actions such as terminating or modifying territorial rights, reducing the development area, or reducing the number of restaurants listed in the development schedule if a franchisee is in default. Therefore, maintaining 'Good Standing' is crucial for a Cicis franchisee to retain benefits, avoid penalties, and ensure the smooth operation and growth of their franchise.