Following notice of death or disability, how long does Cicis have to exercise its option to purchase the franchisee's interest in the Cicis franchise?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
will, and hereby do, indemnify and hold us harmless against any and all judgments, fines, losses, liabilities, costs, amounts paid in settlement, and reasonable expenses (including, but not limited to attorneys' fees) incurred in connection with our interim management of your Restaurant, except by reason of our gross negligence or willful misconduct. Any Transfer upon death or permanent disability will be subject to the same terms and conditions as described in this Section 13 for any inter vivos Transfer.
- (3) Anything contained in this Section 13.D to the contrary notwithstanding, upon your or your Managing Owner's death or permanent disability, we (or our designee) will have the option, to be exercised in writing within 20 days from the date we receive notice of the death or permanent disability pursuant to Section 13.D.(2) ("Option Period"), to elect to purchase your interest and/or the Managing Owner's interest in this Agreement, your Restaurant, or you, as applicable, as well as the further option to elect to purchase the interest of any other of your Owners (individually, "Interest" and collectively, "Interests") at the price and upon the terms set forth below.
- (a) During the Option Period, the purchase price for the Interests will be determined with reference to the agreed value of your Restaurant ("Agreed Value"), as set forth below. If you are a natural person, then the Agreed Value will be an amount equal to 100% of the Agreed Value. If you are a legal entity, then the purchase price for any Interest will be an amount which bears the same relationship to the Agreed Value as the interest of the Person whose interests are being purchased bears to the total ownership interests in you.
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, in the event of the death or permanent disability of a franchisee or their Managing Owner, Cicis has an option to purchase the franchisee's interest. To exercise this option, Cicis (or their designee) must provide written notice within 20 days from the date they receive notification of the death or permanent disability. This 20-day period is referred to as the "Option Period."
During this Option Period, the purchase price for the interests will be determined based on the agreed value of the restaurant. If the franchisee is a natural person, the agreed value will be 100% of the agreed value. If the franchisee is a legal entity, the purchase price will be proportional to the interest of the person whose interests are being purchased relative to the total ownership interests in the entity.
If Cicis exercises its option to purchase the franchisee's interest, the closing of the purchase must occur on or before 30 days following the date on which Cicis receives notice of the death or permanent disability. However, if additional time is needed to document the start-up expenditures, the closing can be extended to within 45 days after such notice. This provision ensures a relatively quick resolution in the event of unforeseen circumstances affecting the franchisee's ability to continue operating the business.