In the Cicis franchise agreement, how is the franchisor's reliance on a business reason viewed when exercising discretion or judgment?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
Your Managing Owner and/or Operator must be approved by us, as we determine in our sole discretion.
Once approved, your Managing Owner and Operator must, during the entire period they serve in such capacities, continue to meet our qualifications and such other standards as may be set forth in the Manuals or otherwise conveyed to you in writing.
Your Managing Owner and the initial Operator must successfully complete our initial training program (the duration and scope of which may vary, depending upon such person's prior restaurant operating experience) within a reasonable period of time after the execution of this Agreement and prior to the Opening Date.
If your Managing Owner or Operator fails, in our sole judgment, to satisfactorily complete such program, then we will give you an opportunity to designate a new Managing Owner and/or Operator, who must be approved by us.
If such newly designated Managing Owner or Operator fails to complete the initial training program to our satisfaction prior to the scheduled Opening Date, we may terminate this Agreement in accordance with Section 15.A.(2)(e).
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
Based on the 2025 Cicis Franchise Disclosure Document, when Cicis exercises discretion or judgment, it is generally understood to be within their sole discretion. For instance, Cicis has the right to approve a franchisee's Managing Owner and/or Operator, and this approval is based on criteria that Cicis determines at its sole discretion. These individuals must also continue to meet Cicis' qualifications and standards throughout their tenure.
Furthermore, if a Managing Owner or Operator does not satisfactorily complete the initial training program, Cicis, in its sole judgment, can allow the franchisee to designate a new Managing Owner and/or Operator. However, if the newly designated personnel fail to meet Cicis' training standards before the scheduled opening date, Cicis reserves the right to terminate the franchise agreement.
This discretion extends to other areas, such as modifications to the premises after termination of the lease or franchise agreement, where Cicis can make modifications that are reasonably necessary to protect its system signs, marks, and intellectual property rights. While the term 'business reason' is not explicitly mentioned, the franchisor's decisions are framed around maintaining brand standards, operational efficiency, and protecting intellectual property, which implicitly align with business-related justifications.