If Cicis assumes interim management, who is liable for debts incurred during that period?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
We may (but are not obligated to) assume such interim management of your Restaurant; provided that (i) our interim management of your Restaurant will not relieve you of your obligations under this Agreement; (ii) we will not be liable for any debts, losses, costs, or expenses incurred in the operation of your Restaurant during any such period of interim management; (iii) we will have the right to charge a reasonable fee for our management services, plus the direct out-of-pocket costs and expenses incurred in the operation of the Restaurant; and (iv) you will, and hereby do, indemnify and hold us harmless against any and all judgments, fines, losses, liabilities, costs, amounts paid in settlement, and reasonable expenses (including, but not limited to attorneys' fees) incurred in connection with our interim management of your Restaurant, except by reason of our gross negligence or willful misconduct.
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, if Cicis assumes interim management of a restaurant, the franchisee remains responsible for all debts incurred during that period. Specifically, Cicis will not be liable for any debts, losses, costs, or expenses incurred in the operation of the restaurant during the interim management period.
Furthermore, Cicis has the right to charge a reasonable fee for its management services, in addition to covering the direct out-of-pocket costs and expenses incurred while operating the restaurant. The franchisee must also indemnify and hold Cicis harmless against any judgments, fines, losses, liabilities, costs, settlement payments, and reasonable expenses, including attorney's fees, that arise from Cicis's interim management, unless these issues are a result of Cicis's gross negligence or willful misconduct.
This arrangement protects Cicis from financial liabilities while ensuring the restaurant continues to operate. However, it places the financial burden and risk squarely on the franchisee even when Cicis is managing the operations. A prospective franchisee should carefully consider this aspect and seek legal counsel to fully understand the implications of this clause.