What is the effect of the termination of a Cicis franchisee's franchise agreement on the lease?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
Termination of Franchisee's franchise agreement shall constitute a non-curable default under the Lease.
Upon Franchisor's receipt of written notice of Franchisee's breach of the Lease, Franchisor, after written notice to Franchisee and Landlord, may (but shall not be obligated) elect to cure any breach of the Lease.
In the event Franchisor elects to cure or Franchisor notifies Landlord that the
Franchise Agreement has been terminated, then Franchisor, at its sole election, may take one or all of the following actions:
(a) Remove and evict Franchisee from the Premises, after obtaining, Landlord's assignment of Landlord's rights under the Lease for the eviction and removal of the Tenant from the Premises and Landlord will cooperate with Franchisor to pursue such action to a conclusion.
(b) Perform the terms of the Lease on behalf of the Tenant (notwithstanding any removal or eviction of Tenant) for a period not to exceed six months from the first date of any cure by Franchisor for which Franchisor will remain liable, without assuming the Lease; or
(c) At any time within or at the conclusion of such six-month period, assume the Lease for the remainder of the current term, together with the right to exercise any applicable renewal options.
In such event, Landlord and Franchisor will enter into a commercially reasonable agreement to document such assumption.
Franchisor is not a party to the Lease and will have no liability under the Lease unless the Lease is assigned to, and assumed by, Franchisor as herein provided.
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, the termination of a franchisee's franchise agreement constitutes a non-curable default under the lease agreement. This means that if the franchise agreement is terminated, the franchisee is automatically in default of their lease obligations, with no opportunity to correct the default.
Upon Cicis's receipt of written notice of the franchisee's breach of the lease, Cicis has the option, but not the obligation, to cure any breach of the lease after providing written notice to both the franchisee and the landlord. If Cicis elects to cure the breach or notifies the landlord that the Franchise Agreement has been terminated, Cicis has the option to take several actions. These actions include removing and evicting the franchisee from the premises after obtaining the landlord's assignment of rights under the lease for eviction, performing the terms of the lease on behalf of the tenant for up to six months without assuming the lease, or assuming the lease for the remainder of the current term, including any renewal options.
Cicis is not a party to the lease and will not have any liability under the lease unless the lease is assigned to and assumed by Cicis. This arrangement is facilitated through a Franchisee Lease Rider, which is incorporated into the lease agreement and stipulates that its terms supersede any conflicting terms in the lease. The lease rider also grants Cicis the right to enter the premises for up to 30 days after the termination of the lease or franchise agreement to de-identify the premises as a Cicis restaurant, including removing signs and logos.