Under what conditions are Enforcement Costs payable by a Cicis franchisee?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee(1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Enforcement Costs | Costs awarded by the applicable court | As incurred | Payable only if you do not comply with the Franchise Agreement or Area Development Agreement, and we are the prevailing party in any relevant litigation. |
Source: Item 6 — OTHER FEES (FDD pages 14–21)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, Enforcement Costs are payable by the franchisee under specific conditions related to non-compliance and legal proceedings. If a Cicis franchisee fails to comply with the Franchise Agreement or the Area Development Agreement, and Cicis prevails in any litigation related to this non-compliance, the franchisee is responsible for covering the costs awarded by the applicable court. These costs are incurred as the litigation progresses and awarded by the court.
This means that a Cicis franchisee could face significant financial burdens beyond the standard fees and royalties if they violate the terms of their agreement with Cicis and are subsequently sued. The amount payable is not a fixed fee but rather depends on the costs awarded by the court, which can vary widely depending on the complexity and duration of the litigation.
Franchisees should, therefore, ensure strict adherence to the Franchise Agreement and Area Development Agreement to avoid potential litigation and the associated Enforcement Costs. This is a fairly standard clause in franchise agreements, intended to protect the franchisor's interests and ensure compliance across the franchise system. Prospective franchisees should carefully review the terms of the agreements and seek legal counsel to fully understand their obligations and potential liabilities.