Can a Cicis franchisee transfer their franchise without Cicis's approval?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise or other Agreement | Summary | |
|---|---|---|---|
| Area Development Agreement – Section 6.B. | If you (or any of your owners, as applicable) (i) have made or make any material misrepresentation or omission in the application materials; (ii) you fail to comply with the Development Schedule; (iii) make or attempt to make an unpermitted transfer; (iv) fail to comply with 3 or more of your or their obligations during any 12 consecutive month period or on 2 or more separate occasions within any 6 consecutive month period fail to comply with the same obligation under the Area Development Agreement; (v) become insolvent; (vi) fail to comply with anti-terrorism laws, ordinances, regulations and Executive Orders; (vii) fail to comply with any other provision of this Agreement and do not correct the failure within 30 days after we deliver written notice of the failure to you; (viii) or an affiliate fails to comply with any other agreement with us or our affiliate, including any Franchise Agreement, unless the failure is timely and completely cured within any cure period provided under the applicable agreement); or (ix) you (or any of your owners) engage in any conduct which, in our opinion, adversely affects the reputation of Cicis Restaurants or the goodwill associated with the Marks. | ||
| h. "Cause" defined – non-curable defaults | Franchise Agreement – Section 15.A. | If you (or any of your owners, as applicable) (i) become insolvent; (ii) operate your Cicis Restaurant at a location we have not approved or sell any products or services authorized by us; (iii) fail to acquire the right to possess the location or to develop and open your Cicis Restaurant for business within the prescribed timeframe; (iv) fail to construct or remodel your Cicis Restaurant in accordance with the approved plans and specifications; (v) lose the right to possess the premises of your Cicis Restaurant; (vi) close your Cicis Restaurant for business or inform us of your intention to permanently cease operation of your Cicis Restaurant (except as permitted under the Reopen Incentive Addendum), (vii) fail to actively operate your Cicis Restaurant for 3 or more consecutive days, (viii) otherwise abandon or appear to have abandoned your rights; (ix) are convicted of or plead guilty to felony or any other crime or offense that we believe is reasonably likely to have an adverse effect on the System, the Marks, or our goodwill; (x) endanger or threaten public health or safety from the construction, maintenance, or operation of your Cicis Restaurant; (xi) fail to ensure that you and your required personnel complete our initial training; (xii) make or attempt an unauthorized transfer; (xiii) fail, refuse, or neglect promptly to pay (or cause your affiliates to pay) any monies owing to us, any of our affiliates, or the designated suppliers or to submit the financial or other information required by us; (xiv) are in default of any other agreement with us, our affiliate or our designated suppliers (including the Area Development Agreement); (xv) engage in Competing Businesses; (xvi) fail to comply with the confidentiality obligations; (xvii) falsify records; or (xviii) are in breach of your (or their) obligations. | |
| Area Development Agreement – Section 5.C. | Franchise or other Agreement | 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 acquire franchisee’s business | Franchise Agreement – Section 13.C. Area Development Agreement – Section 5.F. | Within 30 days after notice, we have the option to purchase the transferred interest on the same terms and conditions offered by a third party. Within 30 days after notice, we have the option to purchase the transferred interest on the same terms and conditions offered by a third party. | |
| o. | Franchisor's option to purchase franchisee's business | Franchise Agreement – Section 13.D.(3) and Section 16.J Area Development Agreement | Upon your or your Managing Owner's death or permanent disability, we (or our designee) will have the option, to be exercised in writing within 20 days from the date we receive notice of the death or permanent disability pursuant to elect to purchase your interest and/or the Managing Owner's interest in your Cicis Restaurant. If the triggering death or permanent disability occurs within (i) 6 months following the opening date of your Cicis Restaurant, then the purchase price will be an amount equal to your Original Cost (defined in the Franchise Agreement), plus 10%; (ii) 6 |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 45–53)
What This Means (2025 FDD)
According to the 2025 Cicis Franchise Disclosure Document, a franchisee cannot make an unauthorized transfer of their franchise. If a franchisee attempts an unauthorized transfer, it constitutes a non-curable default under the Franchise Agreement, as detailed in Section 15.A. Similarly, under the Area Development Agreement, attempting to make an unpermitted transfer is also a cause for default, as outlined in Section 6.B.
This means that Cicis franchisees must obtain approval from Cicis before transferring their franchise. Failure to do so can result in serious consequences, including termination of the franchise agreement. This provision is designed to ensure that any new franchisee meets Cicis's standards and is capable of maintaining the brand's reputation and operational consistency.
Furthermore, Cicis retains the right of first refusal to acquire the franchisee's business. According to Section 13.C of the Franchise Agreement and Section 5.F of the Area Development Agreement, Cicis has 30 days after notice to purchase the transferred interest on the same terms and conditions offered by a third party. This clause gives Cicis control over who enters the franchise system and protects its interests in maintaining brand standards and profitability.
In the event of the franchisee's or their Managing Owner's death or permanent disability, Cicis also has the option to purchase the franchisee's business. If this occurs within 6 months of the Cicis restaurant opening, the purchase price will equal the Original Cost plus 10%. If it occurs between 6 to 12 months after opening, the purchase price will be based on the Net Sales for the 5-month period preceding the month of the triggering event. This ensures a structured process for business continuity in unforeseen circumstances.