Does Cicis allow a franchisee to use the Development Rights or the Cicis franchise agreement as collateral for a loan?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
Your rights and duties under this Agreement are personal to you (or your owners if you are a Business Entity), and we have granted you the Development Rights in reliance upon our perceptions of your (or your owners') individual or collective character, skill, aptitude, attitude, business ability, and financial capacity. Accordingly, neither you nor any owners, nor any of your or their permitted successors or assigns, shall sell, assign, transfer, convey, give away, pledge, mortgage, or otherwise dispose of or encumber this Agreement (or any direct or indirect interest
in this Agreement), the Development Rights, or any direct or indirect ownership interest in you (regardless of its size) (each, a "Transfer"), without our prior written consent. Any Transfer without our prior written approval is a material breach of this Agreement and has no effect. We may reject any request to consent to the use of the Development Rights or this Agreement as collateral for the repayment of any loan.
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, a franchisee's rights and duties under the Development Agreement are personal, and the Development Rights are granted based on the franchisor's perception of the franchisee's character, skills, business ability, and financial capacity. As such, Cicis requires prior written consent for any transfer of the Development Agreement or Development Rights.
The FDD states that Cicis may reject any request to use the Development Rights or the Development Agreement as collateral for a loan. This means that a franchisee cannot assume they can use these assets to secure financing without Cicis's explicit approval.
This restriction is in place to protect the Cicis brand and the integrity of the franchise system. By maintaining control over who can operate and develop Cicis restaurants, the franchisor aims to ensure that all franchisees meet their standards and have the necessary capabilities. A prospective franchisee should discuss financing options and collateral requirements with Cicis during their due diligence process.