Can Cicis deny a transfer if there is an outstanding default by the franchisee?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
(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;
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, Cicis can deny a transfer if there is an outstanding default by the franchisee. The FDD states that Cicis will not unreasonably withhold consent to a transfer, but they may require satisfaction of certain conditions.
One of the conditions that Cicis may require is that there must not be an outstanding default of any provision of the Franchise Agreement or any other agreement between the franchisee (or their affiliates) and Cicis (or its affiliates). Furthermore, there must not have been any such defaults during the term of any such agreements.
This means that if a Cicis franchisee is in default of their Franchise Agreement, Cicis can deny the transfer. This is a fairly standard clause in franchise agreements, as franchisors want to ensure that the new franchisee is in good standing and will not be a risk to the Cicis brand.