How does Cicis's Item 11, regarding site selection assistance, relate to the potential competition from other franchisees, as described in Item 12?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
le of business opportunities or seller-assisted marketing plans.
ITEM 12 TERRITORY
You will not receive an exclusive territory either under the Franchise Agreement or under the Area Development Agreement. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
Franchise Agreement
The Franchise Agreement gives you the right to operate your Cicis Restaurant at a single location that you select and we accept. You must select your site from within a geographic area that we call your Designated Area and that is described in the Franchise Agreement. As long as you are in compliance with the Franchise Agreement, we will not, during the term of your Franchise Agreement, operate or grant others the right to operate any other Restaurant within a specified geographic area described in the Franchise Agreement (the "Protected Area"). We determine the size of the Protected Area based on various market and economic factors, such as an evaluation of market demographics, the market penetration of similar businesses, the availability of appropriate sites, and the growth trends in the market. The Protected Area generally consists of a portion of a city, county or designated market area.
The Franchise Agreement does not permit you to relocate your Cicis Restaurant. If, at any time during the term of the Franchise Agreement, you request us to consider a relocation, we will do so, but we will not be required to apply any particular standards or guidelines to our consideration. Our decision on whether to grant your request will be made in our sole discretion. You have no right of first refusal or similar rights to acquire additional franchises or establish additional Restaurants.
Other Restaurants, food aggregators, and/or third-party delivery service providers may deliver to customers located in your Protected Area and vice-versa. You may not sell any products or services sold at your Cicis Restaurant through any alternate distribution channels, including, the Internet, catalogue sales, supermarkets, convenience stores, or grocery stores.
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, Item 11 outlines the franchisor's role in site selection, while Item 12 clarifies the franchisee's territory rights and potential competition. Cicis provides assistance in reviewing and potentially accepting the proposed site for a new restaurant, basing their decision on factors like demographics, rental rates, nearby businesses, residential populations, traffic, accessibility, parking, visibility, signage, and competition. The franchisor's approval of the site is crucial, and failure to secure it within 120 days of signing the Franchise Agreement can lead to termination.
However, Item 12 states that franchisees do not receive an exclusive territory. While Cicis defines a "Protected Area" around each franchise where it will not operate or grant another franchise, franchisees may still face competition from other franchisees, company-owned outlets, alternative distribution channels, or competitive brands controlled by Cicis. This means that even with the franchisor's site selection assistance, a franchisee's location could still be impacted by competition from other Cicis restaurants or related businesses.
The interplay between these two items highlights a potential risk for franchisees. While Cicis assists in choosing a site based on various factors, including competition, the lack of an exclusive territory means that the competitive landscape could change during the franchise term. Furthermore, other restaurants, food aggregators, and third-party delivery service providers may deliver to customers located in a franchisee's Protected Area and vice-versa. A prospective franchisee should carefully consider the potential for competition and how it might affect their restaurant's performance, despite the franchisor's initial site selection assistance.