Does Cicis need to notify the franchisee of obligation failures before terminating the Development Agreement?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
BY YOU.**
If you and your owners are fully complying with this Agreement and we materially fail to comply with this Agreement and do not correct the failure within 30 days after you deliver written notice of the material failure to us or if we cannot correct the failure within 30 days and we fail to give you within 30 days after your notice reasonable evidence of our effort to correct the failure within a reasonable time, you may terminate this Agreement effective an additional 30 days after you deliver to us written notice of termination. Your termination of this Agreement other than according to this Section 6.A. will be deemed a termination without cause and a breach of this Agreement.
B. BY US.
We may terminate this Agreement, effective upon delivery of written notice to you, if:
-
- you (or any of your owners) have made or make any material misrepresentation or omission in the Application Materials;
-
- you fail to comply with the Development Schedule or fail to make progress in the development of Restaurants to indicate, in our determination, that you will not be able to satisfy your development obligations under this Agreement for the then-current Development Period;
-
- you (or any of your owners) make or attempt to make a Transfer without complying with the requirements of Section 5;
-
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, Cicis may terminate the Development Agreement with written notice to the franchisee under certain conditions. Specifically, if the franchisee fails to comply with any provision of the Development Agreement, and does not correct the failure within 30 days after receiving written notice from Cicis, Cicis can terminate the agreement. This gives the franchisee a chance to rectify the issue within a specified timeframe.
However, there are exceptions where Cicis can terminate the agreement effective immediately upon delivery of written notice, without providing a prior notice and cure period. These include situations where the franchisee has made material misrepresentations or omissions in the Application Materials, fails to comply with the Development Schedule, or attempts an unauthorized transfer of rights.
Additionally, if a franchisee fails to comply with three or more obligations under the agreement within a 12-month period, or fails to comply with the same obligation on two or more occasions within a six-month period, Cicis can terminate the agreement regardless of whether they provided prior notice or whether the franchisee corrected the failures. This highlights the importance of consistent compliance with all aspects of the Development Agreement to avoid potential termination.
Prospective Cicis franchisees should be aware of these termination conditions and ensure they understand their obligations under the Development Agreement to minimize the risk of termination. It is crucial to maintain open communication with Cicis and address any potential compliance issues promptly to avoid any misunderstandings or disputes that could lead to termination.