What are the consequences if a Cicis franchisee attempts to make a Transfer without complying with Section 5 of the agreement?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
We may terminate this Agreement, effective upon delivery of written notice to you, if:
-
- you (or any of your owners) make or attempt to make a Transfer without complying with the requirements of Section 5;
B. BY YOU OR YOUR OWNERS.
Your rights and duties under this Agreement are personal to you (or your owners if you are a Business Entity), and we have granted you the Development Rights in reliance upon our perceptions of your (or your owners') individual or collective character, skill, aptitude, attitude, business ability, and financial capacity. Accordingly, neither you nor any owners, nor any of your or their permitted successors or assigns, shall sell, assign, transfer, convey, give away, pledge, mortgage, or otherwise dispose of or encumber this Agreement (or any direct or indirect interest
in this Agreement), the Development Rights, or any direct or indirect ownership interest in you (regardless of its size) (each, a "Transfer"), without our prior written consent. Any Transfer without our prior written approval is a material breach of this Agreement and has no effect. We may reject any request to consent to the use of the Development Rights or this Agreement as collateral for the repayment of any loan.
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, if a franchisee attempts to make a Transfer without complying with the requirements of Section 5 of the agreement, Cicis has the right to terminate the agreement, effective immediately upon delivery of written notice.
Furthermore, the FDD states that any Transfer without Cicis's prior written approval constitutes a material breach of the agreement and will be considered to have no effect. This underscores the importance of adhering to the outlined transfer procedures to avoid potential termination and ensure the validity of any transfer-related actions.
This requirement protects Cicis by ensuring that any transfer of ownership or rights is to someone who meets their standards. It also allows Cicis to maintain control over its brand and system, ensuring consistency and quality across all franchise locations. Franchisees should carefully review and comply with Section 5 of the agreement to avoid these serious consequences.