What is the effect of the Cicis franchisee's failure to remain in Good Standing during the notice period for termination?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Termination; Lost Revenue Damages. Provided you and your affiliates have been in Good Standing from the Effective Date and remain so during the notice period specified below, you may, at any time prior to [insert date that is the 18-month anniversary of the Effective Date], and without cause, deliver (as defined in the Franchise Agreement) a written notice to us of your election to terminate the Franchise Agreement. Termination will be effective at the close of business on the 30th day following delivery of your written notice of termination, and you will thereafter be required to comply with all obligations under the Franchise Agreement that are either triggered by or that expressly or by implication survive termination (except the obligation to pay Lost Revenue Damages under Section 16.M of the Franchise Agreement).
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- Definitions. As used in this Amendment, "Good Standing" means that you, your owners, and your affiliates (if any) are not in default of the Franchise Agreement or any other agreement with us or our affiliates; and that you, your owners, and your affiliates have substantially and timely complied with all of the terms and conditions of all such agreements, including the timely satisfaction of all monetary obligations owed to us or our affiliates.
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to the 2025 Cicis Franchise Disclosure Document, a franchisee's failure to remain in good standing during the notice period for termination has specific consequences. If a Cicis franchisee and their affiliates have been in good standing from the effective date of the agreement and remain so during the notice period, they have the option to terminate the Franchise Agreement without cause by providing written notice before the 18-month anniversary of the effective date. This termination becomes effective 30 days after the notice.
However, this right to terminate without cause is contingent upon maintaining good standing throughout the notice period. The FDD defines "Good Standing" as the franchisee, their owners, and affiliates not being in default of the Franchise Agreement or any other agreement with Cicis or its affiliates. This includes substantially and timely complying with all terms and conditions, including the timely satisfaction of all monetary obligations.
Therefore, if a Cicis franchisee fails to remain in good standing during the 30-day notice period, they may lose the right to terminate the agreement without cause. This could expose them to additional financial obligations or liabilities under the Franchise Agreement that would otherwise be waived. It is crucial for franchisees to maintain compliance with all agreement terms to ensure they can exercise their termination rights as outlined in the agreement.