Can Cicis convert other businesses to the Cicis brand within my Protected Area?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
We and our affiliates have and retain all rights within and outside the Protected Area that are not expressly and exclusively granted to you under the Franchise Agreement, without any obligation to compensate you and without regard to whether it competes with your Cicis Restaurant, including the right to do and to authorize others to do the following: (i) establish and operate Cicis Restaurants identified by the Marks at any location outside the Protected Area, including locations that are adjacent or proximate to the Protected Area and in any Reserved Area (defined below) whether within or outside the Protected Area, (ii) establish and operate restaurants under other trade names, service marks, and trademarks at any location within or outside of the Protected Area, (iii) establish and operate Cicis To Go Restaurants anywhere in world, including within the Protected Area, (iv) offer and sell, anywhere in the world (including within the Protected Area) any similar or dissimilar products and services, whether identified by the Marks or by other trademarks, trade names or service marks, through any channel or by any method of distribution other than a full-service Cicis Restaurant (including by or through a Cicis To Go Restaurant, the Internet or similar electronic, virtual, or digital medium), on any terms and conditions we deem appropriate, and (v) acquire, be acquired by, merge with, affiliate with or engage in any transaction with other businesses (whether competitive or not) located anywhere and, even if such businesses are located in the Protected Area, (x) convert the other businesses to the Cici's brand and allow them to operate as part of the System, and/or (y) permit the other businesses to continue to operate under another name and incorporate one or more elements of the System.
Source: Item 12 — TERRITORY (FDD pages 38–40)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, Cicis retains the right to acquire, merge with, affiliate with, or engage in transactions with other businesses, even those located within a franchisee's Protected Area or Development Area. This means Cicis can convert these other businesses to the Cicis brand and allow them to operate as part of the Cicis system. Alternatively, Cicis can permit these businesses to continue operating under another name while incorporating elements of the Cicis system.
This clause in the franchise agreement has significant implications for a Cicis franchisee. Even with a Protected Area, Cicis can introduce competition by converting existing businesses to the Cicis brand within that area. This could dilute a franchisee's market share and potentially impact their revenue. The franchisee would have no recourse to prevent Cicis from taking such actions, as these rights are explicitly reserved by Cicis in the franchise agreement.
It's important to note that while Cicis can convert other businesses, the FDD also states that upon expiration or termination of an Area Development Agreement, Cicis cannot develop or franchise others to develop restaurants within the Protected Area granted to a franchisee under an effective Franchise Agreement. This provides some limited protection to the franchisee during the term of their agreement. However, the ability of Cicis to convert existing businesses remains a significant consideration for prospective franchisees.
Prospective franchisees should carefully consider the potential impact of Cicis's reserved rights on their investment. Understanding the local market and the potential for Cicis to convert existing businesses within the Protected Area is crucial for assessing the risks and opportunities associated with a Cicis franchise.