What happens if there is a material change in the terms of the sale of a Cicis franchise?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
If we do not exercise our right of first refusal, you or your owners may complete the sale to the proposed buyer on the original offer's terms, but only if we otherwise approve the Transfer in accordance with, and you (and your owners) and the transferee comply with the conditions in, Sections 5.B and 5.C above. If you do not complete the sale to the proposed buyer within 60 days after either we notify you that we do not intend to exercise our right of first refusal or the time our exercise expires, or if there is a material change in the terms of the sale (which you agree to tell us promptly), we or our designee will have an additional right of first refusal during the 30-day period following either the expiration of the 60-day period or our receipt of notice of the material change(s) in the sale's terms, either on the terms originally offered or the modified terms, at our or our designee's option.
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, if a franchisee attempts to sell their Development Rights and there is a material change in the terms of the sale, Cicis has specific rights. If Cicis initially declines to exercise its right of first refusal, the franchisee can proceed with the sale to the proposed buyer under the original terms, provided Cicis approves the transfer and the franchisee and buyer comply with all conditions. This sale must be completed within 60 days of Cicis waiving their right of first refusal or the expiration of their exercise period.
However, if the sale is not completed within that 60-day window, or if there is a material change in the terms of the sale, the franchisee must promptly inform Cicis. Following this notification, Cicis or its designee gains an additional 30-day right of first refusal. This allows Cicis to either purchase the Development Rights under the originally offered terms or under the new, modified terms, at their discretion.
This provision ensures that Cicis maintains control over who enters their franchise system and under what conditions. By retaining the right of first refusal, especially in the event of changing sale terms, Cicis can protect its brand and the interests of the franchise network. This is a fairly standard practice in franchising, as franchisors typically want to carefully vet and approve any new franchisees to ensure they meet the brand's standards and are a good fit for the system.