Can a Cicis franchisee withhold payments due under the Franchise Agreement based on alleged nonperformance by Cicis?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
You are not entitled to withhold payments due under this Agreement on grounds of our or our affiliates' alleged or actual nonperformance under this Agreement.
Any payment or report not actually received by us on or before such date will be deemed overdue.
Time is of the essence with respect to all payments you are obligated hereunder.
All unpaid obligations under this Agreement will bear interest from the date due until paid at the rate of five percent (5%) per month or the maximum rate allowed by applicable law, whichever is less.
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, a franchisee is not entitled to withhold payments due under the Franchise Agreement, even if they believe Cicis is not fulfilling its obligations. Any payment or report not received by the due date is considered overdue.
Time is of the essence regarding all payments the franchisee is obligated to make. All unpaid obligations will bear interest from the due date until paid at a rate of five percent (5%) per month, or the maximum rate allowed by applicable law, whichever is less.
This clause is fairly standard in franchise agreements. It means a Cicis franchisee cannot stop making royalty or other required payments to Cicis as a way to express dissatisfaction or seek compensation for perceived failures on Cicis's part. The franchisee must continue to pay and pursue any claims of non-performance through other legal channels, such as mediation or litigation, while remaining current on their financial obligations to Cicis. Failure to pay can result in penalties and legal action from Cicis to recover the debt.