What happens if a Cicis franchisee fails to remain in compliance with the Area Development Agreement?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
ected Area, if any, which we determine based on factors described above in this Item 12.
As long as you remain in compliance with the Area Development Agreement and all Franchise Agreements, we will not develop or operate, or grant anyone else a franchise or other rights to develop and operate, a Restaurant, in the Development Area except for Special Venues. A "Special Venue" is any (1) location in which foodservice is or may be provided by a master concessionaire, (2) location which is situated within or as part of a larger venue or facility (other than a mall or shopping center) and, as a result, is likely to draw the predominance of its customers from those persons who are using or attending events in the larger venue or facility (for example, colleges/universities, convention centers, airports, hotels, sports facilities and stadiums, theme parks, hospitals, transportation facilities, convenience stores, and other similar captive market locations), or (3) distribution channel other than a Restaurant through which products and services are or may be sold.
Source: Item 12 — TERRITORY (FDD pages 38–40)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, if a franchisee fails to remain in compliance with the Area Development Agreement, Cicis has the right to develop or operate a restaurant, or grant anyone else the rights to develop and operate a restaurant, in the Development Area. The only exception to this is for Special Venues. Special Venues include locations in which foodservice is or may be provided by a master concessionaire, locations within a larger venue or facility, or distribution channels other than a restaurant through which products and services are or may be sold.
This means that while a franchisee is in compliance, Cicis will not open or franchise another restaurant within the Development Area, providing a degree of exclusivity. However, this protection is contingent on the franchisee adhering to the terms of the Area Development Agreement. Failure to comply removes this protection, allowing Cicis to develop or franchise other restaurants in the area, potentially creating direct competition for the non-compliant franchisee.
Furthermore, upon the expiration or termination of the Area Development Agreement, Cicis and its affiliates have the right to develop and operate restaurants, and to franchise others to do the same, within the former Development Area. The only exception to this is within the Protected Area granted to the franchisee under any effective Franchise Agreement between Cicis and the franchisee. This highlights the importance of maintaining compliance and understanding the terms of both the Area Development Agreement and the Franchise Agreement to protect the franchisee's investment and market area.