How does Cicis's Item 1, defining the franchisor, relate to the litigation described in Item 3?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 1: The Franchisor and any Parents, Predecessors, and Affiliates]
ITEM 1
THE FRANCHISOR AND ANY PARENTS, PREDECESSORS, AND AFFILIATES
The franchisor, On Smile LLC, is referred to in this Disclosure Document as "franchisor" or "us." We refer to the entity interested in buying the franchise as "you." If you are not a natural person, your owners will be required to guarantee and assume your obligations under the agreements, so references to "you" will also include your owners. When we refer to "Cicis Restaurants," we are referring to both Cicis Buffet Restaurants and Cicis To Go Restaurants.
The Franchisor and its Agents for Service of Process
We are a limited liability company, formed in Delaware on February 16, 2021. Our principal business address is 13355 Noel Road, Suite 1645, Dallas, TX 75240. Our sole business is to offer, sell and service the franchises described in this Disclosure Document, and we do not offer franchises in any other line of business. We do not conduct business under any names except our legal name and "Cicis" or "Cicis Pizza." We have never operated any other businesses, including the type being franchised, or offered franchises in any other line of business. We began offering franchises for Cicis Restaurants as of May 28, 2021.
Our agent for service of process in our jurisdiction of organization (Delaware) is Corporate Creations Network Inc. having its principal business address at 3411 Silverside Road Tatnall Building Ste 104, New Castle, Wilmington, DE 19810. Please see Exhibit A to this Disclosure Document for a list of the names and addresses of our agents for service of process in other states.
Parents, Predecessors, and Affiliates
We are a wholly owned subsidiary of CiCi Acquisition Company, LLC ("CAC"); CAC is a wholly owned subsidiary of CiCi Enterprises, LP ("CiCi Enterprises"); CiCi Enterprises is a subsidiary of Smiley Slice, LLC ("Smiley Slice"); and Smiley Slice is a subsidiary of Sunil D. Dharod Revocable Trust ("Trust"). CAC, CiCi Enterprises, Smiley Slice and Trust, each share our principal address.
We have no predecessors.
[Item 3: LITIGATION]
ITEM 3 LITIGATION
*GCP Cici's, LLC v.
Sunil D.
Dharod, as Trustee of The Sunil D.
Dharod Revocable Trust, SSCP Management, LLC, and OnWin, LLC*, Case No.
DC-24-01196, District Court of Dallas County, Texas, filed January 23, 2024 (the "Gala Action"), and *Smiley Slice, LLC and Sunil D.
Dharod v.
Anand Gala*, Case No.
DC-24-03968, District Court of Dallas County, Texas, filed March 12, 2024 (the "Dharod Action").
These are related actions that present disputes by family members, Anand Gala ("Gala") and Sunil Dharod ("Dharod"), arising out of their acquisition and co-ownership of the Cicis Pizza brand.
The complaints allege that, following the acquisition of the Cicis Pizza brand, 30% of the ownership of Smiley Slice, the post-acquisition franchisor of the Cicis brand, was held indirectly and controlled by Gala, 70% was held indirectly and controlled by Dharod, and Gala was appointed as Smiley Slice's chief executive officer.
The plaintiff in the Gala Action alleges that Gala was not paid for his services as Smiley Slice's chief executive officer and that Dharod used his majority position to, among other things, amend Smiley Slice's operating agreement to require payment by Smiley Slice of an excessive management fee that diluted the value of Smiley Slice and to restrict the members' rights to invest in other restaurant opportunities independently of each other.
The plaintiff seeks unspecified damages, injunctive relief and costs based on claims of breach of contract, breach of fiduciary duty, fraud, and civil conspiracy.
On March 11, 2024, the defendants in the Gala Action denied the plaintiff's allegations, and Dharod asserted a counterclaim alleging that the plaintiff fraudulently misrepresented that it would present other restaurant investment opportunities to Dharod for potential participation.
Dharod seeks actual, consequential and exemplary damages and reimbursement of costs.
[Item 3: LITIGATION]
Litigation Against Franchisees in the Last Fiscal Year
In 2024, CiCi Enterprises, as the franchisor under Franchise Agreements for Cicis Restaurants, to which it was a party prior to when we commenced offering franchises, initiated the following lawsuits against the franchisees:
Suits for Recovery of Outstanding Payments:
CiCi Enterprises, LP v. Matison Bixby and Sarah Bixby; Case No. DC-24-07340; filed on May 20, 2024 before the 162nd District Court, Dallas County, Texas.
CiCi Enterprises, LP v. Tunde Bankole and Mopelola Bankole; Case No. DC-24-07332; filed on May 20, 2024 before the 193rd District Court, Dallas County, Texas.
Suits to Enforce Post-Termination Obligations of Franchises:
CiCi Enterprises, LP and Yes Caps, LLC v. Pies For You, LLC, Stacy Scherr, Bernard Scherr and Deorios Pizza, LLC, Case No. 3:24-cv-02244-D, filed on September 2, 2024 before the United States District Court, Northern District of Texas.
Other than these actions, no litigation is required to be disclosed in this Item.
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, Item 1 identifies On Smile LLC as the franchisor. It also details the relationships between On Smile LLC and its parents and affiliates, including CiCi Enterprises, LP, which previously offered and sold Cicis franchises from September 2003 until April 2021. This is relevant to Item 3, which discloses litigation involving CiCi Enterprises, LP, as well as litigation related to the acquisition and co-ownership of the Cicis Pizza brand.
Specifically, Item 3 mentions lawsuits initiated by CiCi Enterprises, LP against franchisees for recovery of outstanding payments and to enforce post-termination obligations. It also discusses legal disputes between family members, Anand Gala and Sunil Dharod, arising from their acquisition and co-ownership of the Cicis Pizza brand through Smiley Slice, LLC. These disputes involve allegations of breach of contract, breach of fiduciary duty, fraud, and civil conspiracy.
The connection between Item 1 and Item 3 lies in the fact that the entities involved in the litigation, such as CiCi Enterprises, LP, Smiley Slice, LLC, and Sunil D. Dharod Revocable Trust, are identified in Item 1 as the parents, predecessors, and affiliates of the current franchisor, On Smile LLC. This provides context for understanding the nature of the legal disputes and their potential impact on the Cicis franchise system. Prospective franchisees should carefully review both Item 1 and Item 3 to assess the risks associated with the franchise and the stability of the Cicis brand.