Can Cicis use the marketing fund to pay for general operating expenses?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
We may use the Fund to satisfy the costs of planning, maintaining, administering, directing, preparing and placing marketing. This includes all associated costs of development, production and placement of marketing, which may include but are not limited to traditional and non-traditional advertising and media placement, product innovation, consumer research, consumer and operational testing for the purpose of marketing programs and other departmental costs, including personnel and associated compensation for marketing that we administer, incur, or prepare on behalf of the Fund, including Cicis Websiterelated costs. We may, in our discretion, keep your contributions to the Fund in a separate account but will, in any event, account for them separately from our general operating funds. We will not use the Fund to pay any of our general operating expenses, except for reasonable administrative costs and overhead (if any) that we incur in administering or directing the Fund. We will operate the Fund solely as a conduit for collecting and spending the contributions to the Fund.
We will prepare an annual statement of the Fund's collections and expenses and will make this statement available to you, on your written request, within 120 days after our fiscal year end. We are not required to have the Fund statements audited.
Contributions to the Fund that are not spent in the year in which they are contributed are carried over to succeeding years. Historically, our affiliate has spent virtually all Fund contributions in the year in which they were contributed. Although the Fund is intended to be perpetual, we may
terminate the Fund. We will not terminate the Fund, however, until all Fund monies have been spent for marketing or promotional purposes or returned to the contributors, without interest, based on their respective contributions.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 31–38)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, Cicis is limited in its ability to use the marketing fund for general operating expenses. While Cicis administers the fund and has the discretion to manage marketing programs, the FDD states that the fund cannot be used for general operating expenses.
However, there is an exception: Cicis can use the marketing fund to cover reasonable administrative costs and overhead incurred while administering the fund. This implies that while the marketing fund is primarily intended for marketing-related activities, some portion of it can be used to offset the costs associated with managing the fund itself.
Cicis also states that it will provide an annual statement of the fund's collections and expenses, available to franchisees upon written request within 120 days after the fiscal year end. This provides a degree of transparency regarding how the marketing funds are being used. The FDD also states that unspent contributions to the fund are carried over to succeeding years, and that Cicis will not terminate the fund until all monies have been spent for marketing or promotional purposes or returned to the contributors.