What information regarding ownership interests in the franchisee entity must be provided to Cicis?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
If you are not a natural person:
(1) you are duly organized and validly existing under the Laws of the state of your formation and are duly qualified and authorized to do business in each jurisdiction in which your business activities or the nature of the properties owned by you require such qualification;
(2) your governing documents will at all times provide that your activities are confined exclusively to operating your Restaurant, unless otherwise consented to by us in writing;
(3) the execution and performance of this Agreement are within your power as provided for in your governing documents and have been duly authorized;
(4) you have provided us with copies of your formation and governing documents and any other documents we reasonably request and will provide us with copies of any modifications thereto;
(5) the ownership interests in you are accurately and completely described in Attachment A, and you will maintain at all times a current list of all Owners of record and all beneficial Owners of any class of voting securities or ownership in you, which you will make available to us upon request;
(6) if, after the execution of this Agreement, any Person ceases to qualify as one of the your Owners (defined in Section 17.O.), or if any individual succeeds to or otherwise comes to occupy a position which would, upon designation by us, qualify him as one of your Owners, then you will notify us within 10 days after any such change and, upon designation of such Person by us as one of your Owners or as a Managing Owner, as the case may be, such Person must execute such documents and instruments (including, as applicable, this Agreement) as we require;
(7) your governing documents must provide that ownership interests in you are subject to all restrictions imposed upon assignments or transfers by this Agreement;
(8) any agreements among your Owners must require such Owners to consent to the transfer of ownership interests in you to us or our designee upon the exercise of any rights of first refusal or purchase options we have under this Agreement;
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, if the franchisee is not a natural person, they must provide specific details regarding their organization and ownership. Cicis requires that the ownership interests in the franchisee entity are accurately and completely described in Attachment A of the Franchise Agreement. Furthermore, the franchisee must maintain a current list of all Owners of record and all beneficial Owners of any class of voting securities or ownership, making this list available to Cicis upon request.
Cicis mandates that the franchisee's governing documents ensure activities are confined exclusively to operating the Cicis Restaurant, unless Cicis provides written consent otherwise. The franchisee must supply copies of their formation and governing documents, including any modifications, to Cicis. This ensures Cicis has a clear understanding of the franchisee's operational scope and organizational structure.
Moreover, the Franchise Agreement stipulates that if any person ceases to qualify as an Owner or if a new individual assumes a position that would qualify them as an Owner, Cicis must be notified within 10 days. Any newly designated Owner may be required to execute specific documents or instruments, including the Franchise Agreement itself. This provision allows Cicis to maintain control over who is involved in the ownership and management of the franchise.
Additionally, the franchisee's governing documents must state that ownership interests are subject to all restrictions imposed upon assignments or transfers as outlined in the Franchise Agreement. Any agreements among the Owners must also require them to consent to the transfer of ownership interests to Cicis or its designee if Cicis exercises any rights of first refusal or purchase options. This ensures Cicis retains control over the transfer of ownership and can protect its interests in the franchise.