Does the Area Development Agreement for Cicis grant exclusive rights to the franchisee within the Development Area?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
ected Area, if any, which we determine based on factors described above in this Item 12.
As long as you remain in compliance with the Area Development Agreement and all Franchise Agreements, we will not develop or operate, or grant anyone else a franchise or other rights to develop and operate, a Restaurant, in the Development Area except for Special Venues. A "Special Venue" is any (1) location in which foodservice is or may be provided by a master concessionaire, (2) location which is situated within or as part of a larger venue or facility (other than a mall or shopping center) and, as a result, is likely to draw the predominance of its customers from those persons who are using or attending events in the larger venue or facility (for example, colleges/universities, convention centers, airports, hotels, sports facilities and stadiums, theme parks, hospitals, transportation facilities, convenience stores, and other similar captive market locations), or (3) distribution channel other than a Restaurant through which products and services are or may be sold.
Source: Item 12 — TERRITORY (FDD pages 38–40)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, the Area Development Agreement does not grant exclusive rights to the franchisee within the Development Area, with some exceptions. While franchisees are generally protected from Cicis developing or franchising another restaurant in their Development Area, this protection does not extend to "Special Venues." These Special Venues include locations where foodservice is provided by a master concessionaire, venues within larger facilities drawing customers primarily from those facilities (like universities, airports, or stadiums), and alternative distribution channels. This means Cicis retains the right to establish restaurants in these locations, even within a franchisee's Development Area.
This lack of exclusivity has significant implications for prospective Cicis area developers. It means that Cicis could potentially place another Cicis restaurant within the Development Area in a Special Venue, which could compete with the franchisee's locations. The franchisee's protection is further limited by Cicis's right to offer and sell collateral products, food, and beverage services under the Cicis brand through various channels of distribution, except for full-service Cicis Restaurants within the Protected Area.
Furthermore, upon the expiration or termination of the Area Development Agreement, Cicis has the right to develop, operate, and franchise others to develop and operate restaurants within the former Development Area, except within the Protected Area granted under any effective Franchise Agreement. This means that after the agreement ends, Cicis could directly compete with the franchisee's existing restaurants in the area, except for those specific locations that have a Protected Area under a separate Franchise Agreement.
Therefore, while the Area Development Agreement provides some territorial protection, it is crucial for potential franchisees to understand the limitations and exceptions, particularly regarding Special Venues and the rights Cicis retains both during and after the agreement term. Franchisees should carefully evaluate the potential impact of these exceptions on their business and growth strategy within the Development Area.