How long does Cicis have to exercise its right of first refusal to acquire a transferred interest?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in | Summary | |
|---|---|---|---|
| Area Development Agreement – Section 5.C. | Franchise or other Agreement | You must (i) pay all amounts due us and our affiliates and third- party vendors; (ii) not be in default; (iii) provide us all information and documents we reasonably request including copies of all agreements executed in relation to transfer; (iv) execute a general release; (v) remain liable for pre-transfer obligations; (vi) pay or caused to be paid a transfer fee; and (vii) execute a non-compete agreement. Transferee must (i) meet our criteria; (ii) assume post-transfer obligations; and (iii) execute our then-standard Area Development Agreement. | |
| n. Franchisor’s right of first refusal to acquire franchisee’s business | Franchise Agreement – Section 13.C. Area Development Agreement – Section 5.F. | Within 30 days after notice, we have the option to purchase the transferred interest on the same terms and conditions offered by a third party. Within 30 days after notice, we have the option to purchase the transferred interest on the same terms and conditions offered by a third party. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 45–53)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, Cicis has 30 days to exercise its right of first refusal. Specifically, within 30 days after receiving notice of a proposed transfer, Cicis has the option to purchase the transferring franchisee's interest. This purchase would be on the same terms and conditions as offered by the third party seeking to acquire the interest. This applies to both the Franchise Agreement and the Area Development Agreement.
This right of first refusal is a common provision in franchise agreements. It allows Cicis to maintain control over who becomes a franchisee within their system. By matching the terms of a third-party offer, Cicis can prevent unwanted or unqualified individuals from joining the franchise network.
For a prospective franchisee, this means that if they decide to sell their Cicis franchise, they must first offer Cicis the opportunity to buy it on the same terms offered by any potential buyer. This could potentially delay a sale, as the franchisee must wait 30 days for Cicis to make a decision. However, it also ensures that the franchisee is getting a fair market price for their business, as Cicis must match the third-party offer.
It is important for a franchisee to understand the implications of this right of first refusal before entering into a franchise agreement with Cicis. They should carefully consider how this provision might affect their ability to sell their franchise in the future and discuss any concerns with a franchise attorney.