Is closing a Cicis Restaurant for business considered a non-curable default?
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 | |------------------------------------------------------------------|----------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
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, closing a Cicis Restaurant for business is considered a non-curable default under the Franchise Agreement. Specifically, if a franchisee closes their Cicis Restaurant for business, or informs Cicis of their intention to permanently cease operation (except as permitted under the Reopen Incentive Addendum), it constitutes a 'cause' for termination that cannot be cured. Additionally, failing to actively operate the Cicis Restaurant for three or more consecutive days also constitutes a non-curable default.
This means that if a Cicis franchisee closes their restaurant, Cicis has the right to terminate the franchise agreement immediately without providing an opportunity to remedy the situation. This is a significant risk for franchisees, as any closure, even temporary, could lead to the loss of their franchise. The exception to this is if the closure is permitted under the Reopen Incentive Addendum, which may provide specific circumstances where temporary closures are allowed without triggering a default.
It's important to note that this non-curable default applies not only to permanent closures but also to a failure to actively operate the restaurant for just three consecutive days. This could include situations where the restaurant is temporarily closed due to unforeseen circumstances such as equipment failure, staffing shortages, or local emergencies. Franchisees need to be aware of this strict requirement and have contingency plans in place to ensure continuous operation.
Prospective Cicis franchisees should carefully review the Franchise Agreement, particularly Section 15.A, to fully understand the implications of these non-curable defaults. They should also inquire about the specific conditions and exceptions outlined in the Reopen Incentive Addendum to determine the extent to which temporary closures are permitted. Understanding these terms is crucial for managing the risk of termination and ensuring the long-term viability of their Cicis franchise.