Can a Cicis Area Development Agreement be transferred separately from the Franchise Agreements signed under it?

According to Cicis's 2025 Franchise Disclosure Document, an Area Development Agreement cannot be transferred separately from the Franchise Agreements signed under it. The FDD states that any transfer of the Area Development Agreement or the Development Rights must include the transfer of all Franchise Agreements signed under that Area Development Agreement to the same transferee.

This condition ensures that the new owner takes on the full responsibilities and obligations associated with developing the area, maintaining the integrity of Cicis's development plans. It prevents a situation where someone could sell off the development rights while leaving existing franchise agreements in limbo or to be managed by a separate, potentially unapproved, entity.

If a franchisee wishes to transfer their Area Development Agreement, they must find a buyer willing to acquire all existing franchise agreements associated with it. This could potentially limit the pool of potential buyers, as it requires a significant investment and commitment to the Cicis system. The prospective buyer would need to be approved by Cicis and meet all the standard requirements for franchisees, including financial capacity and operational experience. This also means that the transferee must execute Cicis's current form of Guaranty, agreeing to be bound by the Area Development Agreement.

Furthermore, Cicis may impose additional conditions on the transfer to protect its brand and interests. These conditions could include the payment of a transfer fee of $7,500, plus reimbursement for reasonable out-of-pocket expenses, and the signing of a general release of claims against Cicis. The selling franchisee and their owners may also be required to sign a non-competition covenant, restricting their ability to engage in similar businesses after the transfer. These measures ensure that Cicis maintains control over its franchise system and that any transfer is in the best interest of the brand.