Does the Cicis franchise agreement require the franchisee to indemnify Cicis against losses during interim management?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
- (2) You or your representative must promptly notify, in writing, us of your or your Managing Owner's death or permanent disability.
At our request, within a reasonable period of time not to exceed seven (7) days from the date of death or permanent disability, the executor, administrator, or other personal representative of the deceased or disabled person will provide for interim management of your Restaurant until such time as a transfer has been effected in accordance with the provisions of this Section 13.D.
Such interim management must be approved by us and must be conducted in accordance with the terms of this Agreement.
We may (but are not obligated to) assume such interim management of your Restaurant; provided that (i) our interim management of your Restaurant will not relieve you of your obligations under this Agreement; (ii) we will not be liable for any debts, losses, costs, or expenses incurred in the operation of your Restaurant during any such period of interim management; (iii) we will have the right to charge a reasonable fee for our management services, plus the direct out-of-pocket costs and expenses incurred in the operation of the Restaurant; and (iv) you 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.
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to the 2025 Cicis Franchise Disclosure Document, the franchise agreement stipulates that a franchisee must indemnify Cicis under specific conditions related to interim management of the restaurant. This requirement arises if the franchisee or their Managing Owner dies or becomes permanently disabled. In such cases, the executor, administrator, or personal representative is expected to provide interim management until a transfer occurs.
Specifically, the franchisee is obligated to protect Cicis from judgments, fines, losses, liabilities, costs, settlement payments, and reasonable expenses, including attorney's fees, that arise from Cicis's interim management of the restaurant. However, this indemnification does not apply if the losses are a result of Cicis's gross negligence or willful misconduct.
This means that as a Cicis franchisee, you are responsible for financial protection of the franchisor during any period they step in to manage the restaurant temporarily due to your or your managing owner's death or disability, unless their own actions are the direct cause of the losses. This clause ensures that Cicis can maintain operations without incurring undue financial risk during such transitions, placing a significant responsibility on the franchisee's estate or the franchisee themselves.