What criteria must a transferee meet to take over a Cicis Area Development Agreement?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in | Summary | |
|---|---|---|---|
| Area Development Agreement – Section 5.C. | Franchise or other Agreement | You must (i) pay all amounts due us and our affiliates and third- party vendors; (ii) not be in default; (iii) provide us all information and documents we reasonably request including copies of all agreements executed in relation to transfer; (iv) execute a general release; (v) remain liable for pre-transfer obligations; (vi) pay or caused to be paid a transfer fee; and (vii) execute a non-compete agreement. Transferee must (i) meet our criteria; (ii) assume post-transfer obligations; and (iii) execute our then-standard Area Development Agreement. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 45–53)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, a transferee seeking to take over an Area Development Agreement must meet certain criteria. Specifically, the transferee must meet Cicis's criteria, assume all obligations post-transfer, and execute Cicis's then-standard Area Development Agreement. These stipulations ensure that any new developer is qualified and committed to upholding Cicis's standards and contractual obligations.
These requirements are typical in franchising, as franchisors like Cicis need to maintain brand consistency and protect their system. By ensuring the transferee meets their criteria, Cicis aims to minimize disruptions and maintain the integrity of its development plans. The requirement to assume post-transfer obligations ensures the new party is fully responsible for fulfilling the development schedule and other commitments outlined in the original agreement.
The need to execute Cicis's then-standard Area Development Agreement is also a common practice. This allows Cicis to update the agreement with any changes in their policies, fees, or operational requirements, ensuring the transferee operates under the most current terms. This protects Cicis and provides clarity for the incoming developer.
Prospective franchisees should carefully review the current Area Development Agreement to understand the full scope of obligations they will be assuming. Additionally, it would be prudent to discuss with Cicis what specific criteria they use to evaluate potential transferees to ensure a smooth transition.