In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the Cicis franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Cicis franchise, based on Item 7 of the company’s 2018 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Cicis franchise, based on Items 5 and 6 of the company’s 2018 FDD
- Section IV – Number of franchised and company-owned Cicis outlets at the start of the year and the end of the year for 2015, 2016, and 2017, based on Item 20 of the company’s 2018 FDD
- Section V – Presentation and analysis of Cicis’ financial performance representations, based on Item 19 of the company’s 2018 FDD, including information on the:
- 2017 average net sales, food and paper costs, team labor, management salaries, taxes and benefits, operating expenses, advertising, videos/other income, occupancy costs, and restaurant EBITDA for the 35 company-owned Cicis Restaurants that were open and operating for at least 18 months before December 31, 2017 and that the company operated during the entire period of its fiscal year ended December 31, 2017
- 2017 average, high, and low net sales for the 367 franchised, 35 company-owned, and 402 franchised and company-owned Cicis Restaurants (separately stated, with each group divided into 3 categories according to sales volume) open and operating for at least 18 months before December 31, 2017 and in operation during the entire period of the company’s 2017 fiscal year
Section I – Background Information
14 Things You Need to Know About the Cicis Franchise
Appoints New CEO
1. At the beginning of May 2018, Cicis appointed William M. Mitchell as its new CEO. Mitchell had been working as the company’s interim CEO since January. Before joining Cicis, Mitchell most recently served as president of Dunkin’ Brands International at Dunkin’ Brands Group Inc. and Dunkin’ Donuts LLC, where he was responsible for nearly 8,500 Dunkin’ Donuts and Baskin-Robbins restaurants located in more than 60 countries around the world.
2. Mitchell said, “This is a dynamic time to join the Cicis team because while the system has come far, there is still so much more we can do to become stronger operators, serve our guests better and grow the business. My first area of focus is to get out in the field to meet our franchisees and listen to their ideas about improving how we do things at Cicis.”
Steps Up New Restaurant Openings After Brand Revitalization
3. Over the past few years, Cicis has implemented a successful brand revitalization, resulting in steady sales growth. The brand has been building on this momentum by accelerating new restaurant openings. In the third quarter of 2017, Cicis had two grand openings in Alabama just weeks apart. Around that time, Cicis had nine new franchise and corporate locations under construction, with five additional leases signed and construction pending. Additional locations were planned for the rest of 2017, including locations in Bastrop and Fulshear, Texas.
4. According to Cicis, the new restaurants are generating unprecedented buzz as fans respond to the brand’s improved food quality, menu additions like Stuffed Crust pizzas, and new restaurant design. Cicis CEO Darin Harris said, “With every new restaurant opening, we are improving our brand perception with great-looking restaurants, outstanding buffet offerings and a high-quality guest experience – all at a great value. We and our strategic partners have worked hard to get here, and the excitement we’re seeing at our recent openings is extremely rewarding, to say the least.”
5. For 2018 and beyond, the company has signed multiple development agreements with franchise partners representing more than 68 future restaurants in 14 states.
Launches Create Your Own Personal Pizzas
6. Until recently, one of Cicis’ biggest menu secrets was that the brand had quietly been fulfilling dine-in customers’ special pizza requests. At the beginning of 2018, Cicis made the practice official with the launch of Personal Pizzas, the new custom-ordering program available in all Cicis locations nationwide.
7. According to Cicis, the new Personal Pizzas are being offered in response to the industry trend toward more customized dining experiences. With Personal Pizzas, any customer who purchases a buffet and wants a pizza not currently featured can special order a combination of crust, sauce, and up to four toppings at no extra charge – and still enjoy unlimited pizza, pasta, salad, and dessert.
8. Cicis CMO Billie Jo Waara said, “Diners today expect more in terms of personal service. Though we’ve always allowed special orders, this is the first time we’re really calling out for our guests that they can have literally thousands of possible combinations as part of our regular, everyday offering. As we’ve successfully revitalized the Cicis brand over the past five years, our focus has been improving food and customer experience. Personal Pizzas continue our evolution to align with what our guests have told us they want – more variety, personalization and value.”
9. Customers have the following choices at the Personal Pizza station, which starts with a traditional 9-inch crust or flatbread:
- Choice of sauces – Red Pizza Sauce, Alfredo, Creamy Buffalo, Honey BBQ, Zesty Ranch, Mac & Cheese, or Spinach Alfredo
- Choice of up to four toppings, including meats (pepperoni, ham, sausage, bacon, beef, chicken, or anchovies) and veggies (green peppers, red onions, black olives, mushrooms, diced tomatoes, jalapenos, or pineapple)
- Mozzarella cheese
10. In addition to making their own custom creations, customers can choose from nine Cicis Specialty Pizzas on a 9-inch traditional crust, including Mac & Cheese, Buffalo Chicken, Spinach Alfredo, Zesty Ham & Cheddar, and more. After placing their orders, customers are given a pager that will let them know when their pizza is ready — typically in about 10 minutes.
11. Cicis (formerly CiCi’s Pizza) was founded in 1985 by Joe Croce and Mike Cole in Plano, Texas. Over the next few years, Cicis continued to grow in the Plano area and started to franchise in 1987. By 2001, when Cicis had grown to over 360 locations, the chain decided to update its buffet offerings and remodel its restaurants. Around this time, Croce retired from the company and passed on ownership of Cicis to the company’s executive team.
12. Over the next decade, the leadership of Cicis changed a few times, with William M. Mitchell serving as the company’s current CEO. At Cicis’ height in the mid-2000s, there were over 600 restaurants across the United States, but hundreds of locations have closed since then.
13. In 2015, Cicis once again updated the company’s brand with the addition of a new logo, new name, and redesigned website. Through its latest rebranding efforts, Cicis plans to push national expansion as well as open its first international locations in Canada and Mexico.
Entrepreneur’s Franchise 500
14. Cicis did not earn a spot on Entrepreneur’s 2018 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Cicis franchise costs, based on Item 7 of the company’s 2018 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Cicis’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2018 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 423
- Outlets at the End of the Year: 396
- Net Change: -27
- Outlets at the Start of the Year: 396
- Outlets at the End of the Year: 374
- Net Change: -22
- Outlets at the Start of the Year: 374
- Outlets at the End of the Year: 372
- Net Change: -2
- Outlets at the Start of the Year: 19
- Outlets at the End of the Year: 40
- Net Change: +21
- Outlets at the Start of the Year: 40
- Outlets at the End of the Year: 46
- Net Change: +6
- Outlets at the Start of the Year: 46
- Outlets at the End of the Year: 46
- Net Change: 0
Section V – Financial Performance Representations (Item 19, 2018 FDD) and Analysis
Part 1 – Analysis of Average Net Sales and Certain Average Costs and Expenses for Company-Owned Cicis Restaurants
- Part 1 of this financial performance representation analyzes average Net Sales and certain average costs and expenses for company-owned Cicis Restaurants. To Go Units are not included.
- The analysis was based on the operating results of the 35 company-owned Cicis Restaurants that were open and operating for at least 18 months before December 31, 2017 and that the company operated during the entire period of its fiscal year ended December 31, 2017 (“Sample Restaurants”).
- There are a total of 48 company-owned Restaurants in 7 states. The company excluded 13 Restaurants that it did not operate for the entire period identified above, including 3 Restaurants that were closed, 1 that was refranchised, and 1 that was acquired by the company.
- These Restaurants offer substantially the same products and services that your Restaurant will offer.
- Each of the Sample Restaurants used a uniform accounting system, and the data was prepared on a basis consistent with generally accepted accounting principles during the applicable period.
- The Sample Restaurants averaged 8 years in operation.
- The information in this Item 19 has not been audited.
Table 1 – Average Net Sales for Sample Restaurants in Fiscal Year 2017 (Unaudited)