Is breaching obligations considered a non-curable default under the Cicis Franchise Agreement?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
| h. "Cause" defined – non-curable defaults | Franchise Agreement – Section 15.A. | If you (or any of your owners, as applicable) (i) become insolvent; (ii) operate your Cicis Restaurant at a location we have not approved or sell any products or services authorized by us; (iii) fail to acquire the right to possess the location or to develop and open your Cicis Restaurant for business within the prescribed timeframe; (iv) fail to construct or remodel your Cicis Restaurant in accordance with the approved plans and specifications; (v) lose the right to possess the premises of your Cicis Restaurant; (vi) close your Cicis Restaurant for business or inform us of your intention to permanently cease operation of your Cicis Restaurant (except as permitted under the Reopen Incentive Addendum), (vii) fail to actively operate your Cicis Restaurant for 3 or more consecutive days, (viii) otherwise abandon or appear to have abandoned your rights; (ix) are convicted of or plead guilty to felony or any other crime or offense that we believe is reasonably likely to have an adverse effect on the System, the Marks, or our goodwill; (x) endanger or threaten public health or safety from the construction, maintenance, or operation of your Cicis Restaurant; (xi) fail to ensure that you and your required personnel complete our initial training; (xii) make or attempt an unauthorized transfer; (xiii) fail, refuse, or neglect promptly to pay (or cause your affiliates to pay) any monies owing to us, any of our affiliates, or the designated suppliers or to submit the financial or other information required by us; (xiv) are in default of any other agreement with us, our affiliate or our designated suppliers (including the Area Development Agreement); (xv) engage in Competing Businesses; (xvi) fail to comply with the confidentiality obligations; (xvii) falsify records; or (xviii) are in breach of your (or their) obligations. | | | Provision | Section in Franchise or other Agreement | Summary | |------------------------------------------------------------------|----------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | Area Development Agreement – Section 6.B. | If you (or any of your owners, as applicable) (i) have made or make any material misrepresentation or omission in the application materials; (ii) you fail to comply with the Development Schedule; (iii) make or attempt to make an unpermitted transfer; (iv) fail to comply with 3 or more of your or their obligations during any 12 consecutive month period or on 2 or more separate occasions within any 6 consecutive month period fail to comply with the same obligation under the Area Development Agreement; (v) become insolvent; (vi) fail to comply with anti-terrorism laws, ordinances, regulations and Executive Orders; (vii) fail to comply with any other provision of this Agreement and do not correct the failure within 30 days after we deliver written notice of the failure to you; (viii) or an affiliate fails to comply with any other agreement with us or our affiliate, including any Franchise Agreement, unless the failure is timely and completely cured within any cure period provided under the applicable agreement); or (ix) you (or any of your owners) engage in any conduct which, in our opinion, adversely affects the reputation of Cicis Restaurants or the goodwill associated with the Marks.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 45–53)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, breaching obligations can be considered a non-curable default under the Franchise Agreement. Specifically, if a franchisee (or any of their owners) is in breach of their obligations, it is categorized as a non-curable default, which provides grounds for termination of the franchise agreement by Cicis. This means Cicis does not have to provide an opportunity to cure the default.
This provision is significant for prospective franchisees as it highlights the importance of adhering to all contractual obligations outlined in the Franchise Agreement. Failure to comply with these obligations can lead to immediate termination of the franchise, resulting in the loss of the business and potentially significant financial repercussions.
It is important to note that while a general breach of obligations is listed as a non-curable default, other types of defaults may have cure periods. For example, under the Area Development Agreement, a franchisee typically has 30 days to cure defaults not listed as non-curable. Therefore, franchisees should carefully review the Franchise Agreement and Area Development Agreement to understand which defaults are curable and which are not.
In summary, the non-curable default provision related to breaching obligations underscores the need for franchisees to maintain strict compliance with all terms and conditions of the Franchise Agreement to avoid immediate termination and potential financial losses.