factual
Does the Cicis Franchise Agreement or Area Development Agreement contain important provisions regarding the franchise relationship?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 17: RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION]
| Provision | Section in | Summary | |
|---|---|---|---|
| Area Development Agreement – Section 5.C. | Franchise or other Agreement | You must (i) pay all amounts due us and our affiliates and third- party vendors; (ii) not be in default; (iii) provide us all information and documents we reasonably request including copies of all agreements executed in relation to transfer; (iv) execute a general release; (v) remain liable for pre-transfer obligations; (vi) pay or caused to be paid a transfer fee; and (vii) execute a non-compete agreement. Transferee must (i) meet our criteria; (ii) assume post-transfer obligations; and (iii) execute our then-standard Area Development Agreement. | |
| n. Franchisor’s right of first refusal to acquire franchisee’s business | Franchise Agreement – Section 13.C. Area Development Agreement – Section 5.F. | Within 30 days after notice, we have the option to purchase the transferred interest on the same terms and conditions offered by a third party. Within 30 days after notice, we have the option to purchase the transferred interest on the same terms and conditions offered by a third party. | |
| amount equal to your Original Cost (defined in the Franchise | |||
| Agreement), plus | 10%; (ii) 6 | to 12 months following | the |
| Provision | Section in Franchise or other Agreement Area Development Agreement - Section 6. | Summary Under the Area Development Agreement, you have 30 days to cure defaults not listed in (h) below. You may also cure defaults under any other agreement with between you (or your affiliates or guarantors) and us (or our affiliates) within the applicable cure period, if any. | |
| h. "Cause" defined – non-curable defaults | Franchise Agreement – Section 15.A. | If you (or any of your owners, as applicable) (i) become insolvent; (ii) operate your Cicis Restaurant at a location we have not approved or sell any products or services authorized by us; (iii) fail to acquire the right to possess the location or to develop and open your Cicis Restaurant for business within the prescribed timeframe; (iv) fail to construct or remodel your Cicis Restaurant in accordance with the approved plans and specifications; (v) lose the right to possess the premises of your Cicis Restaurant; (vi) close your Cicis Restaurant for business or inform us of your intention to permanently cease operation of your Cicis Restaurant (except as permitted under the Reopen Incentive Addendum), (vii) fail to actively operate your Cicis Restaurant for 3 or more consecutive days, (viii) otherwise abandon or appear to have abandoned your rights; (ix) are convicted of or plead guilty to felony or any other crime or offense that we believe is reasonably likely to have an adverse effect on the System, the Marks, or our goodwill; (x) endanger or threaten public health or safety from the construction, maintenance, or operation of your Cicis Restaurant; (xi) fail to ensure that you and your required personnel complete our initial training; (xii) make or attempt an unauthorized transfer; (xiii) fail, refuse, or neglect promptly to pay (or cause your affiliates to pay) any monies owing to us, any of our affiliates, or the designated suppliers or to submit the financial or other information required by us; (xiv) are in default of any other agreement with us, our affiliate or our designated suppliers (including the Area Development Agreement); (xv) engage in Competing Businesses; (xvi) fail to comply with the confidentiality obligations; (xvii) falsify records; or (xviii) are in breach of your (or their) obligations. | |
| Provision | Section in Franchise or other Agreement | Summary | |
| ------------------------------------------------------------------ | ---------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | |
| Area Development Agreement – Section 6.B. | If you (or any of your owners, as applicable) (i) have made or make any material misrepresentation or omission in the application materials; (ii) you fail to comply with the Development Schedule; (iii) make or attempt to make an unpermitted transfer; (iv) fail to comply with 3 or more of your or their obligations during any 12 consecutive month period or on 2 or more separate occasions within any 6 consecutive month period fail to comply with the same obligation under the Area Development Agreement; (v) become insolvent; (vi) fail to comply with anti-terrorism laws, ordinances, regulations and Executive Orders; (vii) fail to comply with any other provision of this Agreement and do not correct the failure within 30 days after we deliver written notice of the failure to you; (viii) or an affiliate fails to comply with any other agreement with us or our affiliate, including any Franchise Agreement, unless the failure is timely and completely cured within any cure period provided under the applicable agreement); or (ix) you (or any of your owners) engage in any conduct which, in our opinion, adversely affects the reputation of Cicis Restaurants or the goodwill associated with the Marks. | ||
| i. Franchisee's obligations on termination/ non-renewal | Franchise Agreement – Section 16 | You must immediately (i) cease operating the applicable Cicis Restaurant; (ii) cease using the Marks and the Confidential Information; (iii) cancel any assumed name or equivalent registrations which contain any Mark; (iv) stop identifying yourself and your business as associated with the Cicis brand; (v) pay all outstanding amounts due to us and our affiliates, including enforcement cost; (vi) return the Manual and other Confidential Information to us without retaining a copy of it; and (vii) comply with the non-compete covenants. | |
| Area Development Agreement – Section 7. | You and your owners must immediately (i) cease to exercise or attempt to exercise any of the rights granted under the Area Development Agreement; (ii) comply with all obligations that either expressly survive or by their nature are intended to survive the expiration or termination; and (iii) refrain from interfering or attempting to interfere with our or our affiliates' relationships with any vendors, franchisees or consultants or engage in any other activity which might injure the goodwill of the Marks or the System. | ||
| Provision | Section in Franchise or other Agreement | Summary | |
| ---- | ------------------------------------------------------------------- | ------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| o. | Franchisor's option to purchase franchisee's business | Franchise Agreement – Section 13.D.(3) and Section 16.J Area Development Agreement | 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 elect to purchase your interest and/or the Managing Owne |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 45–53)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, Item 17 provides a table that lists important provisions within both the Franchise Agreement and the Area Development Agreement that govern the franchise relationship. These provisions cover various aspects such as termination, transfer, and dispute resolution.
Specifically, the FDD outlines conditions under which Cicis can terminate the agreement for cause, which include instances where the franchisee becomes insolvent, operates the restaurant at an unapproved location, fails to meet development timelines, or endangers public health and safety. Non-curable defaults also include failing to pay monies owed to Cicis or its affiliates, engaging in competing businesses, or breaching confidentiality obligations. Additionally, the FDD details the franchisee's obligations upon termination or non-renewal, such as ceasing operation of the restaurant, discontinuing the use of Cicis's marks and confidential information, and complying with non-compete covenants.
The Area Development Agreement also contains provisions for termination. These include making material misrepresentations in application materials, failing to comply with the development schedule, attempting an unpermitted transfer, becoming insolvent, or engaging in conduct that adversely affects the reputation of Cicis. Franchisees typically have 30 days to correct failures to comply with the Area Development Agreement after receiving written notice, though some defaults are not curable.
Cicis also retains the right of first refusal to acquire the franchisee's business under both the Franchise Agreement and the Area Development Agreement. Within 30 days of notice, Cicis has the option to purchase the transferred interest on the same terms and conditions offered by a third party. Furthermore, upon the death or permanent disability of the franchisee or their Managing Owner, Cicis has the option to purchase the franchisee's interest within 20 days of receiving notice.
Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only.
It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.