If the relationship with the Managing Owner of a Cicis franchise terminates, what is the franchisee required to do?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
es that sign a franchise agreement with us and will cause each such affiliate and subsidiary to guarantee your obligations hereunder. Further, in the event of any uncured default of its franchise agreement(s) by any such affiliate or subsidiary whose obligations you have guaranteed, you hereby authorize us to withdraw by EFT from your designated bank account any funds necessary to cure such default.
D. Managing Owner; Operator.
- (1) Prior to the execution of this Agreement, you must designate and at all times maintain an Owner who is a natural person approved by us to serve as your Managing Owner ("Managing Owner"), with primary responsibility for the supervision of your activities under this Agreement. Your initial Managing Owner is identified on Attachment A. Unless otherwise approved by us, the Managing Owner will be the same for all franchise agreements executed pursuant to any Development Agreement between you (or your affiliate) and us and the same as the Managing Owner designated under any such Development Agreement. The Managing Owner must own and maintain at least 25% of the direct ownership interests in you. Except as may otherwise be provided in this Agreement, the Managing Owner's interest in you will be and will remain free of any pledge, mortgage, hypothecation, lien, charge, encumbrance, voting agreement, proxy, security interest, or purchase right or options.
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to the 2025 Cicis Franchise Disclosure Document, franchisees must designate and maintain a Managing Owner who is a natural person approved by Cicis. This Managing Owner has primary responsibility for supervising the franchisee's activities under the Franchise Agreement. The Managing Owner must own and maintain at least 25% of the direct ownership interests in the franchisee's business.
If the initial Managing Owner fails to satisfactorily complete the initial training program, Cicis will allow the franchisee to designate a new Managing Owner, who must also be approved by Cicis. If the newly designated Managing Owner fails to complete the initial training program to Cicis' satisfaction before the scheduled opening date, Cicis may terminate the Franchise Agreement.
While the FDD outlines the requirements for a Managing Owner and the consequences of failing to meet training standards, it does not explicitly state the franchisee's obligations if the relationship with an approved Managing Owner terminates during the franchise term. A prospective franchisee should seek clarification from Cicis regarding the specific steps and timeframe required to replace a Managing Owner whose relationship has ended, to ensure compliance with the Franchise Agreement and avoid potential disruptions to the restaurant's operations.