What is the effect of not being in 'Good Standing' on a Cicis franchisee's ability to terminate the agreement without cause?
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 Cicis's 2025 Franchise Disclosure Document, a franchisee's ability to terminate the franchise agreement without cause is contingent upon being in 'Good Standing.' Specifically, 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 may terminate the Franchise Agreement without cause at any time prior to the 18-month anniversary of the effective date by providing written notice to Cicis. This termination becomes effective 30 days after the notice is delivered.
However, if the franchisee is not in 'Good Standing,' this right to terminate without cause is forfeited. 'Good Standing' is defined as the franchisee, their owners, and affiliates not being in default of the Franchise Agreement or any other agreement with Cicis or its affiliates. It also requires substantial and timely compliance with all terms and conditions of these agreements, including the timely satisfaction of all monetary obligations owed to Cicis or its affiliates.
In practical terms, this means a Cicis franchisee must maintain compliance with all aspects of their agreement, including timely payments and adherence to operational standards, to retain the option of terminating the agreement without a specific cause within the first 18 months. Failure to do so results in the loss of this termination right, potentially locking the franchisee into the agreement for its full term or requiring them to demonstrate cause for termination.