Under what circumstances will a Cicis developer be required to pay the Development Fee and Initial Franchise Fees after they were initially waived?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
While you are approved to participate in the Program and remain in good standing, we hereby waive your obligation to pay us a Development Fee under the Development Agreement and an Initial Franchise Fee under the Qualifying Franchise Agreements.
We reserve the right to revoke the waivers at any time you are either no longer approved to participate in the Program or cease to be in good standing, in which case, you will pay us the Development Fee and Initial Franchise Fees which, absent the waivers, 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 and all Franchise 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.
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, a developer participating in the Development Incentive Program may have their waiver or reduction of the Development Fee and Initial Franchise Fees revoked under specific circumstances. If the developer is no longer approved to participate in the Program or ceases to be in "good standing," Cicis reserves the right to revoke the waivers or reductions. In such cases, the developer will be required to pay the full Development Fee and Initial Franchise Fees as outlined in the Development Agreement and Qualifying Franchise Agreements.
Good standing, as defined by Cicis, means that the developer and their affiliates must comply with all material obligations under the Development Agreement, including the Development Schedule, all Franchise Agreements between Cicis and the developer or their affiliates, and all other agreements between the parties. Cicis retains sole discretion to determine whether particular obligations are "material" for the purpose of determining good standing, and their decision is final.
For a prospective Cicis franchisee, this means that while the Development Incentive Program offers potential savings on initial fees, maintaining strict compliance with all agreements is crucial. Failure to meet the obligations or any determination by Cicis that the developer is no longer in good standing can result in the revocation of these incentives, leading to significant additional costs. Therefore, developers should carefully review and understand all terms and conditions of the Development Agreement, Franchise Agreements, and any other agreements with Cicis to ensure continued eligibility for the program benefits.