Under what condition will Cicis increase the Royalty Fee, and by how much will Cicis increase the Royalty Fee?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee(1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee | 5% of Net Sales for a Cicis Buffet Restaurant; 6% of Net Sales for a Cicis To Go Restaurant (subject to reduction for participation in current incentive programs). | The day of the week we specify (currently, Thursday) | See Notes 2, 3, 4, and 5 |
| Non-Compliance Fee | $250 per failure to comply with the Franchise Agreement, plus, your royalty fee will increase by one (1) percentage point until you have cured all deficiencies | On demand, the day after non- compliance occurs | Payable only if you are in default of your obligations under the Franchise Agreement. |
Source: Item 6 — OTHER FEES (FDD pages 14–21)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, the Royalty Fee can increase under specific circumstances related to non-compliance with the Franchise Agreement. The standard royalty fee is 5% of Net Sales for a Cicis Buffet Restaurant or 6% of Net Sales for a Cicis To Go Restaurant.
Should a franchisee fail to comply with the Franchise Agreement, Cicis will impose a Non-Compliance Fee of $250 for each instance of non-compliance. More significantly, the royalty fee will increase by one percentage point. This increase remains in effect until the franchisee rectifies all identified deficiencies.
This provision serves as a strong incentive for Cicis franchisees to adhere strictly to the terms outlined in the Franchise Agreement. The combination of a flat Non-Compliance Fee and an increased royalty rate can substantially impact a franchisee's profitability, making consistent compliance crucial for financial stability. Franchisees should, therefore, ensure they fully understand and meet all obligations detailed in the Franchise Agreement to avoid these additional costs.