Does the Cicis Lease Rider allow a Permitted Assignee to further sublet or assign the lease?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
the Franchisee is in default under the Lease, upon thirty (30) days prior written notice to Landlord, to sublet, assign or otherwise transfer its interest in the Lease to Franchisor or Franchisor's affiliate, as the case may be, or to any entity with which Franchisor may merge or consolidate, or to any person or entity which is an authorized franchisee of Franchisor (each, a "Permitted Assignee"), without Landlord's consent. Following such an assignment, a Permitted Assignee also may sublet, assign or otherwise transfer its interest in the Lease to another Permitted Assignee without the consent of Landlord. There will be no fee or expense charged in connection with such transfers.
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, the Lease Rider allows a Permitted Assignee to sublet, assign, or transfer its interest in the lease to another Permitted Assignee without the landlord's consent. A "Permitted Assignee" includes Cicis (the Franchisor), Cicis's affiliate, any entity with which Cicis may merge or consolidate, or any authorized Cicis franchisee. There are no fees or expenses charged for these transfers.
This clause provides Cicis with flexibility in managing the lease and the restaurant location. If a franchisee defaults on the lease, Cicis can step in and assign the lease to another qualified party without needing the landlord's approval, as long as that party is a Permitted Assignee. This can help ensure the continued operation of the Cicis restaurant and protect the brand's presence in that location.
For a prospective franchisee, this is a beneficial term in the lease. It means that in certain situations, such as a default, Cicis can facilitate the transfer of the lease to another operator, potentially avoiding a closure of the restaurant. However, it's important to note that the Permitted Assignee assumes the franchisee's obligations under the lease from the date of assignment and may need to cure defaults accruing up to 30 days before Cicis received notice of the default from the landlord.
This arrangement is fairly common in franchising, as it allows the franchisor to maintain control over the location and ensure brand consistency. Franchisees should carefully review the lease and the Lease Rider to understand their rights and obligations, as well as the franchisor's rights, regarding assignment and subletting.