Under what conditions can Cicis revoke a developer's participation in the Veteran's Incentive Program?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
ur Veterans Incentive Program (the "Program") and, in support of your request, have provided us with information, whether as part of the Application Materials or separately (the "Supporting Information"), to confirm your qualifications to participate in the Program. You represent and warrant to us that the Supporting Information is true and correct and that you satisfy all of our requirements for participation in the Program. In reliance on the foregoing, we approve your participation in the Program with respect to Franchise Agreements that you or your affiliates execute pursuant to the Development Agreement from and after the Effective Date of this Addendum (the "Qualifying Franchise Agreements"). You must promptly notify us, in writing, if any of the Supporting Information changes or ceases to be true and correct. We may revoke your participation in the Program if, at any time, we determine that you no longer qualify for participation.
-
- Waiver of Development Fee. 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.
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, Cicis may revoke a developer's participation in the Veteran's Incentive Program if they determine that the developer no longer qualifies for participation. Additionally, Cicis reserves the right to revoke waivers of the Development Fee and Initial Franchise Fee if the developer is no longer approved to participate in the program or ceases to be in good standing. Good standing requires compliance with all material obligations under the Development Agreement, Franchise Agreements, and any other agreements between Cicis and the developer or their affiliates.
Cicis retains sole discretion to determine whether particular obligations are "material" for purposes of determining good standing, and their decision is final. If a developer ceases to be approved or in good standing at any time before the first anniversary of the restaurant's opening date, any royalty fee reductions will become null and void without notice, and the royalty fee will be calculated as described in Section 4.C of the franchise agreement.
For a prospective Cicis franchisee, this means that maintaining eligibility for the Veteran's Incentive Program and remaining in good standing is crucial to retain the benefits of the program, such as waived or reduced fees and royalty fees. Failure to meet these requirements can result in the loss of these incentives and the obligation to pay the full Development Fee, Initial Franchise Fees, and standard Royalty Fees. The franchisee should ensure they understand and can comply with all material obligations under the various agreements to avoid losing the program benefits.
This level of franchisor discretion is not uncommon in franchising, as franchisors need to protect their brand and system standards. However, it places a significant responsibility on the franchisee to maintain compliance and good communication with Cicis to address any potential issues proactively. A prospective franchisee should seek clarification from Cicis on what specific actions or omissions would be considered a breach of material obligations and how Cicis assesses good standing.