Must a Cicis franchisee comply with non-competition covenants after termination?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) interfere with our relationships with any supplier to Cicis Restaurants or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System; and
- (2) for a continuous uninterrupted period commencing upon the expiration or termination of, or a Transfer (defined below) described in, this Agreement and continuing for two (2) years thereafter, except as we otherwise approve in writing, neither you nor any of your Owners and Operator (and members of their immediate family) will, directly or indirectly, for yourselves, or through, on behalf of, or in conjunction with any other Person, by direct inducement or otherwise, engage in any activities described in Section 9.C(1) above in respect of any Competing Business:
- (a) at the Location; or
- (b) within the Protected Area; or
- (c) if this Agreement is executed pursuant to a development agreement, within the development area described therein; or
- (d) within a 10-mile radius of (i) the Location, (ii) the Protected Area, (iii) the development area, if applicable, or (iv) any Cicis Restaurant or other Cicis-branded food service facility in existence or under construction as of the date of this Agreement or at the commencement of the obligation described in this Section 9.C(2).
If any person restricted by this Section 9C(2) fails to comply with the foregoing obligations as of the date of expiration, termination, or Transfer, the 2-year restricted period for that person will commence on the date the person begins to comply 9C(2), which may be the date a court order is entered enforcing this provision.
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, franchisees are subject to certain non-competition covenants following the expiration, termination, or transfer of their Franchise Agreement. Specifically, for a period of two years, the franchisee and their Owners and Operators (including immediate family members) are restricted from engaging in activities related to a Competing Business.
These restrictions apply to several defined geographic areas. The franchisee cannot be involved in a Competing Business at the original restaurant Location, within the Protected Area granted in the franchise agreement, or within the development area if the agreement was part of a development deal. Furthermore, the non-compete extends to a 10-mile radius of the Location, the Protected Area, the development area (if applicable), or any existing or under-construction Cicis restaurant or Cicis-branded food service facility.
The FDD states that if a person fails to comply with these obligations from the date of expiration, termination, or transfer, the 2-year restricted period will commence on the date the person begins to comply with the non-compete terms. This may be the date a court order is entered enforcing this provision, meaning the non-compete clock doesn't start until compliance begins, potentially extending the restriction period if there is an initial violation.