What constitutes a material default of the Cicis franchise agreement that allows Cicis to terminate the agreement immediately?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
(r) you misuse or make any unauthorized use of the Marks or otherwise materially impair the goodwill associated therewith or our rights therein and fail to cure such default within 24 hours following notice from us; or
(s) you (or any of your Owners) (i) fail on three (3) or more separate occasions within any 12 consecutive month period to comply with any provision of this Agreement or (ii) fail on two (2) or more separate occasions within any six (6) consecutive month period to comply with the same obligation under this Agreement, in either case, whether or not we notify you of the failures, and, if we do notify you of the failures, whether or not you correct the failures after our delivery of notice to you.
B.
Other Terminable Events.
Except as provided in Section 15.A above, upon any default by you which is susceptible of being cured, we may terminate this Agreement by giving you written notice of termination, stating the nature of such default, at least thirty 30 days prior to the effective date of termination.
However, you may avoid termination by immediately initiating a remedy to cure such default and curing it to our satisfaction within the 30-day period and by promptly providing us proof of such cure.
If any such default is not cured within the specified time, or such longer period the Laws may require, we may terminate this Agreement effective immediately on written notice to you.
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to the 2025 Cicis Franchise Disclosure Document, Cicis can terminate the franchise agreement immediately if a franchisee is in material default of the agreement. Each obligation within the agreement is considered material and essential, and nonperformance can adversely affect Cicis and its system.
Specifically, Cicis can terminate the agreement without providing an opportunity to cure the default if the franchisee misuses the Marks, impairs the goodwill associated with them, or infringes upon Cicis's rights, and fails to correct this within 24 hours of receiving notice. Additionally, Cicis can terminate the agreement immediately if a franchisee fails to comply with any provision of the agreement on three or more separate occasions within a 12-month period, or on two or more separate occasions within a six-month period regarding the same obligation, regardless of whether Cicis provides notice or whether the franchisee corrects the failures after notification.
If the default is something that can be cured, Cicis may provide a written notice of termination at least 30 days before the termination date. The franchisee can avoid termination by initiating a remedy immediately and curing the default to Cicis's satisfaction within the 30-day period, providing proof of the cure. However, if the default is not cured within the specified time, Cicis can terminate the agreement immediately with written notice.