What constitutes an 'ownership interest' in the context of the Cicis franchise agreement?

According to Cicis's 2025 Franchise Disclosure Document, an "ownership interest" in the context of the franchise agreement refers to the percentage of voting shares or other voting rights. This percentage is calculated by dividing 100% of the ownership interests by the number of owners. This definition is relevant whether the owner is an individual or a business entity.

This definition is important because the franchisor, Cicis, needs to understand who controls the franchise. The franchise agreement specifies that rights and duties are personal to the franchisee or their owners, especially concerning the transfer of ownership. Cicis grants development rights based on their perception of the owner's character, skills, business ability, and financial capacity.

Therefore, any transfer of an ownership interest, regardless of its size, requires Cicis's prior written consent. Transferring without approval constitutes a material breach of the agreement. Cicis may also reject the use of development rights or the agreement as collateral for a loan. This level of scrutiny ensures that any changes in ownership meet Cicis's standards and protect the brand and system.