What is the Cicis franchisee's obligation regarding Competing Businesses after the termination of the franchise agreement?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
- (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 the 2025 Cicis Franchise Disclosure Document, following the termination or expiration of the franchise agreement, franchisees and their owners face specific restrictions regarding involvement with competing businesses. For a period of two years, franchisees and their owners (including immediate family members) are prohibited from engaging in any activities related to a Competing Business. This restriction applies whether the involvement is direct or indirect, and includes acting for oneself or in conjunction with another person.
The restrictions apply to specific geographic areas. Franchisees cannot engage 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 restaurant location, the Protected Area, the development area (if applicable), or any existing or under-construction Cicis restaurant or Cicis-branded food service facility.
If a franchisee or restricted individual fails to comply with these obligations immediately upon termination, the two-year restricted period begins only when they cease the prohibited activities. This means that any delay in compliance will extend the duration of the non-compete obligation. Cicis's ability to enforce this clause could have significant implications for a former franchisee's future business endeavors, potentially limiting their ability to work in the restaurant industry within a specific area for a defined period.