What is the consequence if the transferee of a Cicis franchise fails to execute a Guaranty?

According to the 2025 Cicis Franchise Disclosure Document, a condition for Cicis's consent to a franchise transfer is that each transferee, along with their direct and indirect owners and their spouses, must execute and deliver Cicis's current form of Guaranty. This Guaranty ensures that these individuals are personally bound, jointly and severally, by all provisions of the Franchise Agreement. Alternatively, at Cicis's discretion, they may be required to sign the then-current form of Area Development Agreement and any other related agreements.

If the potential transferee fails to comply with this requirement, Cicis is not obligated to approve the transfer of the franchise. This stipulation ensures that Cicis has recourse to the personal assets of the transferee and related parties should the franchisee fail to meet its financial or operational obligations. The Guaranty provides Cicis with an additional layer of security and demonstrates the transferee's commitment to the franchise.

For a prospective Cicis franchisee, this means that if they plan to sell their franchise, the potential buyer (transferee) and their owners must be willing to sign a personal guaranty. If the transferee is unwilling or unable to do so, Cicis can withhold its consent to the transfer, potentially preventing the sale of the franchise. This requirement is a standard practice in franchising, as it protects the franchisor's interests and ensures that franchisees are fully invested in the success of the business.