What are the consequences if a Cicis franchisee fails to comply with provisions regarding Competing Businesses?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
- (m) you or any Person bound by the provisions of this Agreement regarding Competing Businesses fail to comply with those provisions;
If any person restricted by this Section 9C(2) fails to comply with the foregoing obligations as of the date of expiration, termination, or Transfer, the 2-year restricted period for that person will commence on the date the person begins to comply 9C(2), which may be the date a court order is entered enforcing this provision.
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, if a franchisee or any person bound by the franchise agreement fails to comply with the provisions regarding Competing Businesses, it constitutes a breach of the agreement.
Specifically, the FDD outlines noncompetition covenants that restrict franchisees and related parties from engaging in activities that could harm Cicis's business interests. These restrictions apply both during the term of the franchise agreement and for a period of two years after its expiration or termination. The restrictions include not operating or being involved with a Competing Business, which is defined as a business deriving more than 50% of its revenue from pizza sales using authorized distribution methods.
If a person restricted by the non-compete clause fails to comply with these obligations after the franchise agreement expires, terminates, or is transferred, the two-year restricted period will only begin when the person starts complying with the non-compete terms. This may be the date a court order is issued to enforce the provision, meaning the franchisee could face legal action to enforce compliance. This could significantly extend the period during which the franchisee is restricted from engaging in a Competing Business.