What constitutes a 'Transfer' requiring Cicis' prior written consent?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
By You and Your Owners.
The rights and duties set forth in this Agreement are personal to you, and we have entered into this Agreement in reliance on your representations as to your and, if applicable, your Owners' business skill, financial capacity, and personal character.
Accordingly, neither you nor any of your Owners, nor any of your or their successors or assigns, will (i) sell, assign, transfer, convey, give away, pledge, mortgage, or otherwise dispose of or encumber any direct or indirect rights under or interest in this Agreement, in your Restaurant (or its assets), in you, and/or (ii) transfer or surrender the possession, control, or management of your Restaurant (each a "Transfer") without our prior written consent.
Any purported Transfer, by operation of Law or otherwise, made in violation of this Agreement will be null and void.
(1) We will not unreasonably withhold our consent to a Transfer, but we may require satisfaction of certain conditions and otherwise reasonably qualify our consent, including in respect of the following (each of which you agree is reasonable):
(a) all monies owed to us, our affiliates, and all suppliers to your Restaurant must be paid current and all other outstanding obligations to us and our affiliates arising under this Agreement or any other agreement will have been satisfied in a timely manner;
(b) there must not be an outstanding default of any provision of this Agreement or of any other agreement between you or any of your affiliates and us or any of our affiliates, and there must not have been any such defaults during the term of any such agreements;
(c) the transferor and its Owners (if applicable) must execute a general release, in form and substance satisfactory to us, of any and all claims, however arising, against us, our affiliates, and the officers, directors, shareholders, partners, agents, representatives, independent contractors, servants, and employees of each from the beginning of time to the date of transfer;
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, a 'Transfer' requiring prior written consent includes several scenarios related to the ownership and control of the franchise. Specifically, it encompasses any action by the franchisee or their owners to sell, assign, transfer, convey, give away, pledge, mortgage, or otherwise dispose of or encumber any direct or indirect rights or interests in the Franchise Agreement, the restaurant (or its assets), or the franchisee entity itself. Additionally, transferring or surrendering possession, control, or management of the Cicis restaurant also constitutes a transfer requiring consent.
This provision is in place because Cicis relies on the representations of the franchisee and their owners regarding their business skills, financial capacity, and personal character when entering into the Franchise Agreement. Therefore, any change in ownership or control could potentially impact the operation and reputation of the Cicis franchise. Any transfer made without Cicis's prior written consent is considered null and void, giving Cicis significant control over who operates their franchises.
Cicis states that it will not unreasonably withhold consent to a transfer, but it may require satisfaction of certain conditions. These conditions include ensuring all monies owed to Cicis, its affiliates, and restaurant suppliers are current, and that there are no outstanding defaults under the Franchise Agreement or any other agreements. The transferor must also execute a general release of claims against Cicis and its affiliates. The prospective franchisee should carefully review these conditions to understand the requirements for obtaining consent and the potential costs involved, such as renovations or training programs.
Furthermore, the transferee must enter into a written agreement assuming all obligations of the Franchise Agreement, and may be required to execute Cicis's then-current standard form of franchise agreement, which may include different terms such as higher royalty fees. The transferee must also demonstrate that they meet Cicis's criteria for prospective franchisees and may be required to renovate the restaurant to current system standards. These stipulations ensure that any new franchisee meets Cicis's standards and maintains the quality and consistency of the brand. Prospective franchisees should be aware of these requirements and factor in the potential costs and obligations when considering a transfer.