Besides terminating the agreement, what other remedies can Cicis pursue if a franchisee defaults?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
If you or your Affiliates are in default of any provision of this Agreement or any Franchise Agreement executed pursuant hereto, we may, in our sole discretion, instead of terminating this Agreement terminate or modify any territorial rights or protection granted to you in Section 2.B. of this Agreement, reduce the size of your Development Area, reduce the number of Restaurants listed in the Development Schedule, and/or pursue any other remedy we may have at law or in equity. Our exercise of any of our options under this Section will not constitute a waiver by us to exercise our option to terminate this Agreement at any time with respect to a subsequent event of default of a similar or different nature and will not obligate us to refund any portion of the Development Fee.
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, besides terminating the agreement, Cicis has other options if a franchisee defaults. Cicis may choose to terminate or modify any territorial rights or protection granted to the franchisee in Section 2.B of the agreement. Cicis can also reduce the size of the franchisee's Development Area or reduce the number of Restaurants listed in the Development Schedule. Additionally, Cicis can pursue any other remedy available at law or in equity.
It is important to note that Cicis's decision to exercise any of these options does not prevent them from terminating the agreement later if there is a subsequent default. Furthermore, Cicis is not obligated to refund any portion of the Development Fee if they exercise any of these remedies instead of terminating the agreement. This means that even if a franchisee's territory is reduced, or their development schedule is altered due to a default, they will not receive a refund on their initial Development Fee.
This clause provides Cicis with significant flexibility in addressing franchisee defaults, allowing them to take corrective action without immediately resorting to termination. For a prospective franchisee, this highlights the importance of adhering to the franchise agreement to avoid potential modifications to their territorial rights or development schedule. It also underscores the non-refundable nature of the Development Fee, even in situations where the franchisee's rights or obligations are altered due to a default.