If a Cicis franchisee or managing owner becomes permanently disabled, how long does the franchisee have to transfer interests to a third party after receiving notice from Cicis?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
(1) In case of your or your Managing Owner's death, your or their interests, as applicable, in you, this Agreement and your Restaurant must be transferred to a third party we approve within 12 months after the date of death or permanent disability. If you or, as applicable, your Managing Owner should become permanently disabled, we may, in our sole discretion, require such interests to be transferred to a third party in accordance with the conditions described in this Section 13.D within six (6) months after notice to you. "Permanent disability" means any physical, emotional, or mental injury, illness, or incapacity which would prevent a person from performing the obligations set forth in this Agreement or in the guaranty made part of this Agreement for at least 90 consecutive days and from which condition recovery within 90 days from the date of determination of disability is unlikely. Permanent disability will be determined by a licensed practicing physician we select (and at our costs), upon examination of the person; or if the person
refuses to submit to an examination, then such person automatically will be deemed permanently disabled as of the date of such refusal for the purpose of this Section 13.D.
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to the 2025 Cicis Franchise Disclosure Document, if a franchisee or their managing owner becomes permanently disabled, Cicis has the discretion to require the interests to be transferred to a third party. If Cicis exercises this option, the franchisee has six months from the date of notice to complete the transfer.
The FDD defines "permanent disability" as a physical, emotional, or mental condition preventing the person from fulfilling their obligations under the Franchise Agreement or guaranty for at least 90 consecutive days, with recovery within 90 days being unlikely. Cicis selects and pays for a licensed physician to determine permanent disability. Refusal to submit to an examination results in automatic classification as permanently disabled.
It is important to note that the franchisee or their representative must promptly notify Cicis in writing of the disability. Following notification of permanent disability, Cicis has the option to purchase the franchisee's interest in the agreement, restaurant, or the franchisee themselves. This option must be exercised in writing within 20 days of receiving notice. This clause highlights the importance of understanding the implications of permanent disability on the franchise agreement and the potential for Cicis to intervene and potentially acquire the franchise interest.