Is a Cicis franchisee required to pay all amounts due to affiliates before transferring the franchise?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
rent Franchise Agreement and other agreements; and (iv) complete our then-current training program. | | | Provision | Section in Franchise or other Agreement | Summary | |----|----------------------------------------------|-------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | Area Development Agreement – Section 5.C. | 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 | Franchise Agreement – Section 13.C.
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 must meet certain financial obligations before transferring their franchise. Specifically, the franchisee must pay all amounts due to Cicis, its affiliates, and third-party vendors. This requirement ensures that all outstanding debts and financial responsibilities are settled before the transfer is approved. This condition applies to transfers under both the Franchise Agreement and the Area Development Agreement.
This requirement is a fairly standard practice in franchising. Franchisors want to ensure that the business being transferred is in good financial standing and that all debts are cleared. By requiring the franchisee to pay all outstanding amounts, Cicis protects its financial interests and the interests of the new franchisee.
In addition to paying all outstanding amounts, the franchisee must also not be in default, execute a general release, remain liable for pre-transfer obligations, pay a transfer fee, and comply with post-termination non-compete covenants. The potential transferee must also meet Cicis's criteria, upgrade the restaurant to current standards, execute a current Franchise Agreement and other agreements, and complete the then-current training program. Meeting all of these conditions is necessary for Cicis to approve the transfer of the franchise.