If Cicis acquires a business in the Development Area, can it convert it to a Cicis brand?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding the foregoing, we reserve for ourselves and our affiliates all rights not expressly granted to you in the Area Development Agreement without any obligation to compensate you, including the right to do and to authorize others to do the following: (i) use and license others to use the System and any elements of the System in any business located or operated anywhere in the world; (ii) own and operate, and license others to own and operate, or otherwise become associated with, any business, anywhere in the world, that uses or is identified by any names, symbols or trademarks, except, as described above, in a restaurant that is located in the Development Area and is identified by the Marks; (iii) acquire, be acquired by, merge, affiliate with or engage in any transaction with other businesses (whether competitive or not) located anywhere and, even if such businesses are located in the Development Area, (a) convert the other businesses to the Cicis brand, (b) allow such other businesses to operate as part of the System, whether or not converted to the Cicis, and/or (c) permit the other businesses to continue to operate under another name; (iv) solicit customers, advertise, and authorize others to advertise, and promote sales of and from Restaurants, and fill customer orders by providing catering and delivery services anywhere, including within the Development Area; and (v) market and sell, and grant to others the right to market and sell, within and outside of the Development Area, products and services authorized for sale at Restaurants through alternative channels of distribution such as Internet, catalog sales, telemarketing, grocery stores, kiosks, mail order, or through Cicis To Go) using the Marks or other trademarks and commercial symbols.
Source: Item 12 — TERRITORY (FDD pages 38–40)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, Cicis retains significant rights regarding businesses within a franchisee's Development Area. Specifically, Cicis has the right to acquire other businesses, even those located within a franchisee's Development Area, and then convert them to the Cicis brand. This means that Cicis could acquire an existing restaurant or food service business within your designated Development Area and rebrand it as a Cicis restaurant.
This clause in the FDD has important implications for prospective Cicis franchisees. While franchisees are granted a Development Area, Cicis reserves the right to operate or franchise others to operate within that area under certain circumstances. The possibility of Cicis converting an acquired business to a Cicis brand within your Development Area could potentially increase competition and impact your restaurant's market share.
Furthermore, Cicis also has the option to allow acquired businesses to continue operating under another name, even if located in the Development Area. They can also permit these businesses to incorporate elements of the Cicis system. This flexibility retained by Cicis allows them to adapt to market conditions and potentially introduce different concepts or brands without violating the Area Development Agreement.
Therefore, it is crucial for potential franchisees to understand the scope of Cicis's rights within the Development Area and to consider how these rights might affect their investment and business operations. Prospective franchisees should discuss these scenarios with Cicis during their due diligence to fully understand the potential competitive landscape.