What is the franchisee's obligation regarding the exploitation of Development Rights for Cicis during the Term and throughout the Development Area?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
Subject to the terms and limitations contained herein, we grant you the Development Rights. You accept and agree to exercise the Development Rights in strict accordance with the terms and conditions contained in this Agreement. You acknowledge and agree that, as described further in this Agreement:
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- the Development Rights may only be exercised by the execution by us and you or your Affiliate that we approve of our then-current form of Franchise Agreement which, except as expressly provided in this Agreement, may be materially different than the form of Franchise Agreement we are using to grant Franchises on the Effective Date;
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- the Development Rights may only be exercised with respect to Restaurants to be located in the Development Area identified on Attachment A (the "Development Area");
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- you or your approved Affiliate will develop and open Restaurants, in each case pursuant to the applicable Franchise Agreement but as necessary to satisfy the minimum opening requirements of each of the time periods (each a "Development Period") that comprise the overall development schedule described in Attachment A hereto (the "Development Schedule"); and
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- the Development Rights may be exercised from the Effective Date and, unless this Agreement is sooner terminated as provided herein, continuing through the earlier of (1) the date on which the last Restaurant which is required to be opened in order to satisfy the Development Schedule opens for regular business or (2) the last day of the last Development Period of the Development Schedule (the "Term")
You agree to, at all times, faithfully, honestly and diligently perform your obligations under this Agreement and to fully exploit the Development Rights during the Term and throughout the entire Development Area. Except for having your Affiliates that we approve sign Franchise Agreements, you may not subcontract or delegate any of your rights or obligations under this Agreement to any third parties.
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, a franchisee who is granted Development Rights is obligated to fully exploit these rights throughout the entire Development Area during the Term of the agreement. This means the franchisee must diligently and honestly perform their obligations under the agreement.
Specifically, the franchisee must develop and open restaurants as required to meet the minimum opening requirements within the Development Schedule. These restaurants must be located within the Development Area as defined in Attachment A of the agreement. The franchisee can have an affiliate that Cicis approves sign the Franchise Agreements, but cannot subcontract or delegate any other rights or obligations to third parties.
This obligation is significant because Cicis expects the franchisee to actively develop the territory. Failure to meet the development schedule could result in Cicis modifying or terminating the territorial rights, reducing the Development Area, or reducing the number of restaurants in the Development Schedule. The franchisee is expected to have independently investigated and determined that they can satisfy the Development Schedule, as Cicis does not guarantee the Development Area can support the specified number of restaurants.