Does the Cicis Development Incentive Program Addendum address the transferability of the development rights?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
B. BY YOU OR YOUR OWNERS.
Your rights and duties under this Agreement are personal to you (or your owners if you are a Business Entity), and we have granted you the Development Rights in reliance upon our perceptions of your (or your owners') individual or collective character, skill, aptitude, attitude, business ability, and financial capacity. Accordingly, neither you nor any owners, nor any of your or their permitted successors or assigns, shall sell, assign, transfer, convey, give away, pledge, mortgage, or otherwise dispose of or encumber this Agreement (or any direct or indirect interest
in this Agreement), the Development Rights, or any direct or indirect ownership interest in you (regardless of its size) (each, a "Transfer"), without our prior written consent. Any Transfer without our prior written approval is a material breach of this Agreement and has no effect. We may reject any request to consent to the use of the Development Rights or this Agreement as collateral for the repayment of any loan.
If you intend to list your Development Rights for sale with any broker or agent, you shall do so only after obtaining our written approval of the broker or agent and of the listing agreement and any advertising materials. You may not use any Mark in advertising the transfer or sale of your Development Rights or of any ownership in you without our prior written consent.
C. CONDITIONS FOR APPROVAL OF TRANSFER.
We may consider, and you will provide or assist us in compiling, any information we deem necessary or appropriate in connection with our assessment of a proposed Transfer. If we elect to approve a proposed Transfer, we may, at our discretion, condition our approval in any manner we deem necessary and appropriate to protect the Cicis brand and our interests in the System and this Agreement, including any of the following (each of which you agree is reasonable):
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, the Development Incentive Program Addendum does not explicitly outline the transferability of development rights. However, the FDD does address the transfer of development rights within the standard Area Development Agreement, which the Addendum supplements.
Specifically, the agreement states that development rights are personal to the developer, and Cicis grants these rights based on their assessment of the developer's character, skills, business ability, and financial capacity. Therefore, franchisees cannot transfer the Development Rights without prior written consent from Cicis. Any transfer without this approval constitutes a material breach of the agreement and is considered void.
Cicis retains the right to reject any request to use the Development Rights as collateral for a loan. If a franchisee intends to list their Development Rights for sale, they must first obtain written approval from Cicis regarding the broker or agent, the listing agreement, and any advertising materials. Furthermore, franchisees are prohibited from using any of Cicis's trademarks in advertising the transfer or sale of their Development Rights without prior written consent from Cicis.
If Cicis approves a proposed transfer, they may impose conditions to protect the Cicis brand and their interests in the system. These conditions are deemed reasonable and may include requirements for additional information to assess the proposed transfer.