Who is considered a 'Permitted Assignee' under the Cicis Lease Rider?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
the Franchisee is in default under the Lease, upon thirty (30) days prior written notice to Landlord, to sublet, assign or otherwise transfer its interest in the Lease to Franchisor or Franchisor's affiliate, as the case may be, or to any entity with which Franchisor may merge or consolidate, or to any person or entity which is an authorized franchisee of Franchisor (each, a "Permitted Assignee"), without Landlord's consent. Following such an assignment, a Permitted Assignee also may sublet, assign or otherwise transfer its interest in the Lease to another Permitted Assignee without the consent of Landlord. There will be no fee or expense charged in connection with such transfers.
Landlord and Franchisee acknowledge and agree that a Permitted Assignee will assume all of Franchisee's obligations under the Lease arising as a result of events, acts or omissions occurring from and after the date of assignment. In the event that Franchisee is in default of its obligations under the Lease as of the effective date of the assignment to a Permitted Assignee: a) the Permitted Assignee shall be obligated to cure such default, but only to the extent such default accrued not more than thirty (30) days prior to the date Franchisor received notice of such default from Landlord; and b) Landlord may pursue, or continue to pursue, a claim for damages under the Lease against Franchisee, but will have no rights to terminate the lease or to disturb the quiet possession of the Leased Premises by the Permitted Assignee.
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, a 'Permitted Assignee' under the Lease Rider includes Cicis (the Franchisor) or Cicis's affiliate. It also includes any entity with which Cicis may merge or consolidate, or any person or entity which is an authorized franchisee of Cicis. This definition is relevant when the franchisee is in default under the lease, allowing for the possibility of transferring the lease to one of these 'Permitted Assignees' without the landlord's consent after providing a 30-day written notice to the landlord.
Following such an assignment, the Permitted Assignee can further sublet, assign, or transfer the lease to another Permitted Assignee without needing the landlord's consent. There are no fees or expenses associated with these transfers. This clause ensures that Cicis has options to maintain the restaurant's location and operation even if the original franchisee faces difficulties.
The Permitted Assignee assumes all of the franchisee's obligations under the lease from the date of assignment forward, meaning they are responsible for events, acts, or omissions occurring after that date. If the franchisee is in default when the lease is assigned, the Permitted Assignee must cure the default, but only to the extent that it accrued within 30 days before Cicis received notice of the default from the landlord. The landlord retains the right to pursue damages against the original franchisee for any defaults but cannot terminate the lease or disturb the Permitted Assignee's quiet possession of the premises.
This arrangement provides Cicis with flexibility and control over the restaurant location, mitigating risks associated with franchisee default. It also protects the landlord by ensuring that any outstanding issues caused by the original franchisee can still be addressed, while a new, qualified operator (the Permitted Assignee) takes over the location. This is a fairly common clause in franchise agreements, as it allows the franchisor to maintain brand presence and operational continuity.