How many days does Cicis have to exercise its right of first refusal to acquire a franchisee's business?
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. This right allows Cicis to purchase the franchisee's interest under the same terms and conditions offered by a third party. This applies to both the Franchise Agreement and the Area Development Agreement.
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. Cicis has 30 days from the notice of the proposed sale to decide whether to exercise this option. If Cicis matches the offer, the franchisee is obligated to sell the business to Cicis instead of the third party.
The right of first refusal is a common clause in franchise agreements, giving the franchisor control over who enters the system. It allows Cicis to maintain brand consistency and standards by ensuring that any new owner meets their criteria. Franchisees should consider this when planning their exit strategy, as it may affect the timing and terms of a potential sale.
It is important for franchisees to understand the implications of this clause, as it can impact their ability to sell the franchise to a buyer of their choice. Franchisees should carefully review Section 13.C of the Franchise Agreement and Section 5.F of the Area Development Agreement to fully understand their rights and obligations regarding the transfer of their Cicis franchise.