What is the Cicis franchisee's obligation regarding compliance with covenants regarding Competing Businesses after termination?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
: - (a) divert, or attempt to divert, any business or customer of your Restaurant to any competitor, by direct or indirect inducement or otherwise; - (b) except with respect to other Cicis Restaurants operated under valid franchise agreements with us, own, maintain, operate, engage in, be employed by, or have any financial or beneficial interest in, advise, assist, aid, make loans to, act as landlord to, or otherwise support, anywhere in the world, any Competing Business (defined below); or
- (c) interfere with our relationships with any supplier to Cicis Restaurants or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System; and
- (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.
- (3) A "Competing Business" is a business that (i) derives more than 50% of its revenue from selling pizza (including fresh, frozen, or unbaked pizza) using the distribution methods (including dine-in, carry-out, catering, or delivery) we authorize, (ii) functions as a commissary to sell or lease to or supply any such business, or (iii) grants franchises or licenses for or provides services to any of the foregoing.
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, following the expiration, termination, or transfer of the Franchise Agreement, the franchisee, along with their Owners and Operator (including immediate family members), is restricted from engaging in any activities related to a Competing Business for a period of two years. This restriction applies to the restaurant's location, the Protected Area, or, if applicable, the development area. It also extends to a 10-mile radius of these locations, as well as any existing or under-construction Cicis Restaurant or Cicis-branded food service facility. However, this is subject to written approval from Cicis.
A "Competing Business" is defined as any business that derives more than 50% of its revenue from selling pizza through methods Cicis authorizes, operates as a commissary supplying such businesses, or grants franchises/licenses for or provides services to such businesses. The non-compete obligations include not interfering with Cicis's supplier relationships or performing any action that could harm the goodwill associated with Cicis's trademarks and system.
If a person bound by these restrictions fails to comply from the date of expiration, termination, or transfer, the two-year restricted period will only begin when they start complying with the non-compete obligations. This may be the date a court order is issued to enforce the provision. Cicis retains the right to reduce the scope of any covenant with immediate effect upon notice. Claims against Cicis do not serve as a defense against the enforcement of these covenants.