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Considering a Cicis Franchise? Don’t Overlook These 31 Important Franchise Fees

by Franchise Chatter on November 4, 2017

in Franchise Fees, Pizza Franchises



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If you are considering a Cicis franchise, don’t get blindsided by these 31 important franchise fees (from the initial franchise fee, to the royalty fee, to 29 other fees found in Items 5 and 6 of Cicis’ 2017 FDD).

1.  Initial Franchise Fee – Cicis Restaurants:  $30,000



  • For your first Restaurant, the initial franchise fee is $30,000.
  • If you or a related entity establish additional Restaurants and are not in default under any agreements with Cicis or its affiliates, then the initial franchise fee is $25,000. A related entity is one that shares a common managing principal who is approved by Cicis under its then-current policies (including execution of a conflicts waiver letter) to serve as the managing principal for multiple franchisees.
  • The entire payment is due at the time you sign the Franchise Agreement, unless you sign a Development Agreement (see below).

2.  Initial Franchise Fee – Cicis To Go Unit:  $7,500 per Cicis To Go Unit

  • The initial franchise fee is $7,500 per Cicis To Go Unit, regardless of the number of Cicis To Go Units you contract to develop or open.
  • The entire payment is due at the time you sign the Franchise Agreement, unless you sign a Development Agreement (see below).

3.  Development Fee:  100% of the initial franchise fee for the first Restaurant or To Go Unit to be developed and 40% of the initial franchise fee for each succeeding Restaurant or To Go Unit to be developed

  • If you sign a Development Agreement for one or more Restaurants or To Go Units, you must pay a development fee when the Development Agreement is signed in an amount equal to the total of 100% of the initial franchise fee for the first Restaurant or To Go Unit to be developed and 40% of the initial franchise fee for each succeeding Restaurant or To Go Unit to be developed.
  • The pro rata portion of the development fee allocable to each Restaurant or To Go Unit will be credited against the initial franchise fee due for that Restaurant or To Go Unit.

4.  Royalty Fee:  the Base Royalty Rate is currently 4% of the first $28,850 of weekly Net Sales; 5% of the incremental weekly Net Sales from $28,851 to $33,650; 5.5% of the incremental weekly Net Sales from $33,651 to $38,450; and 6% of the incremental weekly Net Sales in excess of $38,450

  • Due Date:  Thursday of each week for the preceding week.
  • In 2016, the average royalty for the top 5 franchised Restaurants was 4.42% based on the tiered royalty formula.
  • Cicis may increase all royalty rates by 1% on written notice to you.

5.  Marketing Fund:  Restaurant – the greater of $3,450 or 5% of Net Sales; Cicis To Go Unit – the greater of $1,100 or 3% of Net Sales

  • Due Date:  10th business day following the end of each accounting period. If the 10th falls on a weekend, then next banking day.
  • There are 3 accounting periods in each calendar quarter. The first accounting period in each quarter is 5 weeks, and the remaining 2 accounting periods in the quarter are 4 weeks each (fiscal years with 53 weeks will have 5 weeks in December).
  • You must pay the Marketing Fund contribution by electronic funds transfer.

6.  Local Marketing:  2% to 4% of Net Sales (currently, 2%)

  • Due Date:  N/A
  • Cicis may require you to spend at least 2% and no more than 4% of Net Sales each month on Local Marketing. This amount is in addition to your Marketing Fund obligation.

7.  Cooperative Marketing:  currently, none



  • Due Date:  N/A
  • Cicis has the right to establish Marketing cooperatives. If Cicis establishes a cooperative in your area, you must participate and contribute to the cooperative an amount equal to any required Local Marketing expenditure.
  • Cicis will credit the amount you must contribute to the cooperative against your Local Marketing obligation amount.

8.  Marketing and Promotional Materials:  reasonable cost

  • Due Date:  When billed.
  • If you request, Cicis will provide you banners, ad slicks, and similar materials that it has developed for use in Marketing the Restaurant.

9.  Cicis System and Services Fee:  $150 annually

  • Due Date:  When billed.
  • Cicis System and Services enables you to conduct certain activities electronically.

10.  Administrative Fee:  maximum – $5,000 per document

  • Due Date:  When billed.
  • If you ask Cicis to amend the Franchise or Development Agreement or consent to, prepare, or review any other documentation for any transaction for which no specific fee is imposed (including, without limitation, reviewing an exception request and preparing any related agreement), you must pay Cicis an administrative fee.

11.  Renewal Fee:  25% of Cicis’ then-current initial franchise fee for a Cicis Restaurant or To Go Unit, as applicable, plus reimbursement of Cicis’ reasonable costs and expenses

  • Due Date:  On renewal.

12.  Interest:  highest rate allowed by applicable law

  • Due Date:  On demand.
  • Cicis may charge you interest on all overdue amounts under both the Franchise and Development Agreements.

13.  Training for Replacement or Successor Personnel:  reasonable fee plus expenses



  • Due Date:  If applicable, before training.
  • Cicis has the right to charge a reasonable fee to train any replacement or successor Managing Principal or Manager.
  • Under its current policy, Cicis charges $2,500 plus $100 per day for each additional day of training that it determines is necessary for Managing Principals and $250 for Managers.
  • If its trainers have to travel to provide the training, you must also pay for Cicis’ trainers’ airfare plus $100 per day for transportation and $150 per day for lodging.

14.  Additional Training:  reasonable fee plus expenses

  • Due Date:  Before training or when billed, at Cicis’ discretion.
  • Your Managing Principal, Operator, Managers, and other Facility personnel may have to attend additional training programs. Cicis has the right to charge a fee for additional training.
  • The current fee is $100 per person per day plus expenses. If Cicis trainers must travel to provide the training, you must also pay for its trainers’ airfare plus $100 per day for transportation and $150 per day for lodging.

15.  On-site Remedial Training:  reasonable fee plus expenses

  • Due Date:  Before training or when billed, at Cicis’ discretion.
  • If you ask, or if Cicis believes it is appropriate, it will (subject to availability) provide trained representatives to conduct on-site remedial training at your Facility. If Cicis does, it has the right to charge a fee for remedial training. The current fee is $100 per person per day plus expenses.
  • If Cicis’ trainers have to travel to provide the training, you must also pay for its trainers’ airfare plus $100 per day for transportation and $150 per day for lodging.

16.  Transfer Fee:  $5,000 plus any greater amount necessary to reimburse Cicis for its reasonable out-of-pocket costs and expenses in reviewing the transfer application

  • Due Date:  Submitted with transfer application or, in its discretion, paid at closing.
  • If an individual or partnership franchisee transfers its rights to a corporation controlled by the same interest holders, the fee is limited to Cicis’ reasonable out-of-pocket costs and expenses (including applicable legal and accounting fees) to review the application.
  • Similar transfer fees are charged under both the Franchise and Development Agreements.

17.  Securities Offering Fee:  $3,000 or any greater amount necessary to reimburse Cicis for its reasonable costs and expenses in reviewing the proposed securities offering

  • Due Date:  When billed.
  • Cicis must give its consent to any private offering of your securities. A public offering of your securities is not permitted.
  • The Securities Offering Fee is the same amount under both the Franchise and Development Agreements.

18.  Inspection Fee:  a reasonable fee based on Cicis’ expenses

  • Due Date:  On demand.
  • If a quality assurance inspection reveals deficiencies you fail to correct, Cicis may (but need not) correct them for you and charge a fee for its expenses in taking the corrective action (including, without limitation, any necessary re-inspection).
  • In addition to Cicis’ expenses to take corrective action, the inspection fee also currently includes its representatives’ airfare plus $100 per day for transportation and $150 per day for lodging.

19.  Testing Fee:  cost of inspection, if applicable, and cost of test

  • Due Date:  When billed.
  • You (or your supplier) may have to pay an independent laboratory or Cicis for the cost of a test on samples of your products and supplies if it has not previously approved the supplier of the item or if the sample fails to conform to Cicis’ specifications.
  • You must also pay the costs of inspection and testing (including Cicis’ administrative costs attributable to both) under Cicis’ supplier approval procedures.

20.  Indemnification:  varies according to loss

  • Due Date:  On demand.
  • You must indemnify Cicis when certain of your actions, or those of others (such as your Controlling Principal), result in loss to Cicis. In addition, you must indemnify Cicis for any losses it incurs from your or your Managing Principal’s acts or omissions during its work evaluation or management training programs.

21.  Audit Fee:  cost of audit

  • Due Date:  When billed.
  • Payable only if Cicis finds, after an audit, that you have understated any amount owed to it by more than 3%.

22.  Insurance Fee:  a reasonable amount based on its expenses

  • Due Date:  When billed.
  • If you fail to maintain the required insurance, Cicis has the right, but not the obligation, to obtain it for you. If it does, Cicis will charge you a fee plus the cost of the insurance.

23.  Operations Manual Replacement Fee:  $125

  • Due Date:  When billed.
  • Cicis provides one complete Manual at no charge. All replacement copies are at the Restaurant’s expense.

24.  Insufficient Funds Fee:  $25

  • Due Date:  On demand.
  • If a payment does not clear your bank, Cicis charges a service fee of $25, which includes the bank charge. Cicis may draft your account for this fee.

25.  Enforcement Costs:  will vary

  • Due Date:  As incurred.
  • You must pay Cicis’ costs of enforcement (including attorneys’ fees) if you do not comply with the Franchise or Development Agreement.

26.  Post-Termination/Post-Expiration De-identification Costs:  a reasonable fee based on Cicis’ expenses

  • Due Date:  As incurred.
  • If you fail to de-identify after the franchise terminates or expires, Cicis may make the necessary changes at your expense.

27.  Liquidated Damages:  a lump sum amount equal to the weekly average Net Sales for the 52 weeks before termination (or if the Facility has not been operating for 52 weeks, the average for weeks of actual operation) times the corresponding Royalty Fee (as defined) times the lesser of 104 weeks (2 years) or the number of weeks remaining in the term of the Agreement, times 75%

  • Due Date:  On demand.
  • Unless otherwise provided in a Cicis Addendum to Franchise Agreement, you must pay liquidated damages if the Franchise Agreement is terminated.
  • Liquidated Damages begin from the earlier of the termination date or the date that you ceased to operate the Restaurant, if different. They continue until the earlier of (i) the opening of a replacement Cicis Restaurant in the market that was previously served or (ii) the original expiration date of the Franchise Agreement.

28.  Data Compliance Fee:  currently $25 per week, but Cicis may increase this fee up to $50 per week

  • Due Date:  When billed.
  • If you fail to submit to Cicis, when due, any required information or report, including certificates of insurance and financial statements, Cicis may, after first providing notice and a reasonable opportunity to cure (not more than 10 days), assess a Data Compliance Fee, which it may draft by electronic funds transfer from your authorized bank account.
  • If you fail to submit sales information to it when due, Cicis may immediately assess a Data Compliance Fee without notice.

29.  Gift Cards:  $0.50 per card (25 cards/box), minimum 100 total cards in stock

  • Due Date:  When billed.
  • You are required to purchase Cicis gift cards from Cicis’ designated third party supplier and sell and redeem them.

30.  POS Annual Maintenance Fee:  approximately $1,680 to $3,500

  • You must use a Cicis-approved POS System.

31.  Lease Compliance Review Fee:  $1,500 Retainer and $200 an hour

  • Due Date:  When billed.
  • You must pay for Cicis’ approved attorney to conduct a compliance review of your lease and any modification, amendment, or renewal.

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