If a Cicis franchisee is a business entity, what must Attachment A to the Franchise Agreement describe?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
B. BUSINESS ENTITY.
If, instead of being a natural person, you are a business organization such as a corporation, limited liability company or partnership (a "Business Entity"), you agree, represent and warrant to us that: (1) you were validly formed and will maintain, throughout the Term (defined below), your existence and good standing in any state in which you are required, by law, to do so; (2) Attachment A to this Agreement describes all of your owners and their interests in you as of the Effective Date; (3) each of your owners that we designate from time to time (and, on our request, their spouse) will sign and deliver to us our then-standard form of Guaranty and Assumption of Obligations (the "Guaranty"), the current form of which is attached hereto as Attachment B; (4) you will conduct no activities other than those described in this Agreement or in any other written agreement between us and you; and (5) at our request, you will furnish us with true and correct copies of all documents regarding your formation, existence, standing, and governance.
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, if a franchisee is a business entity, Attachment A to the Area Development Agreement must describe all of the business entity's owners and their respective ownership interests as of the agreement's effective date. This requirement ensures Cicis knows who controls the franchisee entity.
This information is crucial for Cicis to assess the suitability and financial stability of the franchisee. By understanding the ownership structure, Cicis can evaluate the experience, skills, and financial resources of the individuals behind the business entity. This helps Cicis mitigate risks associated with the franchisee's ability to fulfill its obligations under the Area Development Agreement.
Furthermore, Cicis requires that designated owners of the business entity sign a Guaranty and Assumption of Obligations, as detailed in Attachment B. This ensures that individuals with significant control over the franchisee are personally liable for the franchisee's performance, providing an additional layer of security for Cicis. Franchisees should be aware of these requirements and ensure full compliance to maintain a good relationship with Cicis.