What is the impact of a Cicis franchisee's failure to comply with obligations that survive termination under the Underperforming Incentive Program?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
f terminating this Agreement terminate or modify any territorial rights or protection granted to you in Section 2.B. of this Agreement, reduce the size of your Development Area, reduce the number of Restaurants listed in the Development Schedule, and/or pursue any other remedy we may have at law or in equity. Our exercise of any of our options under this Section will not constitute a waiver by us to exercise our option to terminate this Agreement at any time with respect to a subsequent event of default of a similar or different nature and will not obligate us to refund any portion of the Development Fee.
7. RIGHTS AND OBLIGATIONS ON TERMINATION OR EXPIRATION OF THIS AGREEMENT.
A. YOUR OBLIGATIONS.
You and, as applicable, your owners and all such other persons or Business Entities who are bound under the terms of this Agreement must immediately upon the expiration or termination of this Agreement, cease to directly or indirectly exercise or attempt to exercise any of the rights granted to you under this Agreement, comply with all obligations that either expressly survive or by their nature are intended to survive the expiration or termination of this Agreement, and refrain from interfering or attempting to interfere with our or our Affiliat
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, franchisees participating in the Underperforming Incentive Program are subject to specific terms and conditions, particularly regarding compliance with obligations that survive the termination of the Franchise Agreement. Upon termination or expiration of the agreement, franchisees must immediately cease exercising any rights granted under the agreement and comply with all obligations that expressly survive or are intended to survive termination. These obligations include non-disparagement, noncompetition, non-interference, confidentiality, and indemnification.
A failure to comply with these surviving obligations can have significant repercussions for the franchisee. Cicis retains the right to pursue legal and equitable remedies against franchisees who fail to meet these obligations. This could involve legal action to enforce the terms of the agreement, seek damages for any losses incurred by Cicis due to the franchisee's non-compliance, or obtain injunctive relief to prevent further breaches of the agreement.
The Franchise Disclosure Document emphasizes that all obligations that survive the agreement's expiration or termination will remain in full effect until they are fully satisfied or naturally expire. This underscores the importance of understanding and adhering to these post-termination obligations to avoid potential legal and financial consequences. Franchisees should carefully review the Franchise Agreement and related addenda to fully understand their responsibilities both during and after the term of the agreement.