What guarantee obligations must the transferee and their owners fulfill for Cicis?

According to Cicis's 2025 Franchise Disclosure Document, each transferee and all its direct and indirect owners, including their spouses, must execute and deliver a copy of Cicis's current form of Guaranty. This Guaranty legally binds them, jointly and severally, to all the provisions outlined in the Franchise Agreement. At Cicis's discretion, they may require adherence to the current form of Area Development Agreement and any other related ancillary agreements instead. This ensures that the new ownership is fully accountable for all contractual obligations.

This requirement is a standard practice in franchising to protect the franchisor's interests during a transfer of ownership. By requiring a Guaranty, Cicis ensures that the transferee and their owners are personally liable for the performance of the franchise, which can mitigate the risk of non-compliance or default. The joint and several liability means that each party is individually responsible for the entire obligation, providing Cicis with multiple avenues for recourse if issues arise.

Prospective franchisees should carefully review the then-current form of Guaranty to fully understand the obligations they will be undertaking. They should also seek legal counsel to assess the implications of signing such a document, as it can have significant financial and legal consequences. Understanding these obligations is crucial for a smooth and successful transfer of the Cicis franchise.