Is a Cicis franchisee required to execute a general release as part of transferring their Area Development Agreement?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise or other Agreement | Summary | |
|---|---|---|---|
| m. | Conditions for franchisor approval of transfer | Franchise Agreement - Section 13.B. | You must (i) pay all amounts due our affiliates, us or third-party vendors; (ii) not be in default; (iii) execute a general release; (iv) remain liable for pre-transfer obligations; (v) pay or cause us to be paid a transfer fee; (vi) comply and cause your other owners and their family members to comply with the post termination non-compete covenants; and (vii) provide us all information and documents we reasonably request including copies of all agreements executed in relation to proposed transfer. Transferee must (i) meet our criteria; (ii) upgrade the Restaurant to then-current standards; (iii) execute a current Franchise Agreement and other agreements; and (iv) complete our then-current training program. |
| franchisee | Area Development Agreement Section 5.C | You cannot assign or transfer without first obtaining our written consent. |
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, a franchisee is required to execute a general release as part of the transfer of their Area Development Agreement. Specifically, the franchisee must meet several conditions to gain Cicis's approval for the transfer. These conditions include paying all outstanding amounts owed to Cicis, its affiliates, and third-party vendors, as well as ensuring they are not in default of their agreements.
In addition to settling financial obligations and maintaining good standing, the franchisee must provide all requested information and documents related to the transfer, which includes copies of all executed agreements. The requirement to execute a general release means the franchisee agrees to release Cicis from any claims or liabilities up to the point of the transfer. The franchisee also remains liable for any obligations that arose before the transfer.
Furthermore, the franchisee is responsible for paying a transfer fee and adhering to non-compete agreements. The party to whom the Area Development Agreement is being transferred (the transferee) must also meet Cicis's criteria, assume all obligations from the point of transfer forward, and execute Cicis's then-standard Area Development Agreement. These stipulations ensure that Cicis maintains control over who becomes an area developer and that all financial and legal matters are settled during the transfer process.
This requirement is fairly standard in franchising, as it protects the franchisor from potential future claims related to the franchisee's past operations. Prospective Cicis franchisees should carefully review the terms of the general release and understand its implications before agreeing to transfer their Area Development Agreement.