Is it a non-curable default if a Cicis franchisee closes their restaurant for business?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
our affiliates or guarantors) and us (or our affiliates) within the applicable cure period, if any. | | | h. "Cause" defined – non-curable defaults | Franchise Agreement – Section 15.A. | If you (or any of your owners, as applicable) (i) become insolvent; (ii) operate your Cicis Restaurant at a location we have not approved or sell any products or services authorized by us; (iii) fail to acquire the right to possess the location or to develop and open your Cicis Restaurant for business within the prescribed timeframe; (iv) fail to construct or remodel your Cicis Restaurant in accordance with the approved plans and specifications; (v) lose the right to possess the premises of your Cicis Restaurant; (vi) close your Cicis Restaurant for business or inform us of your intention to permanently cease operation of your Cicis Restaurant (except as permitted under the Reopen Incentive Addendum), (vii) fail to actively operate your Cicis Restaurant for 3 or more consecutive days, (viii) otherwise abandon or appear to have abandoned your rights; (ix) are convicted of or plead guilty to felony or any other crime or offense that we believe is reasonably likely to have an adverse effect on the System, the Marks, or our goodwill; (x) endanger or threaten public health or safety from the construction, maintenance, or operation of your Cicis Restaurant; (xi) fail to ensure that you and your required personnel complete our initial training; (xii) make or attempt an unauthorized transfer; (xiii) fail, refuse, or neglect promptly to pay (or cause your affiliates to pay) any monies owing to us, any of our affiliates, or the designated suppliers or to submit the financial or other information required by us; (xiv) are in default of any other agreement with us, our affiliate or our designated suppliers (including the Area Development Agreement); (xv) engage in Competing Businesses; (xvi) fail to comply with the confidentiality obligations; (xvii) falsify records; or (xviii) are in breach of your (or their) obligations. | | | Provision | Section in Franchise or other Agreement | Summary | |------------------------------------------------------------------|----------------------------------------------------------|----------------------------------------------------
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, closing a Cicis restaurant for business constitutes a non-curable default under the Franchise Agreement. Specifically, if a franchisee closes their restaurant for business or informs Cicis of their intention to permanently cease operation (except as permitted under the Reopen Incentive Addendum), it is considered a 'cause' for termination that cannot be remedied. Additionally, failing to actively operate the Cicis restaurant for three or more consecutive days also constitutes a non-curable default.
This provision is significant for prospective franchisees because it means that Cicis can immediately terminate the franchise agreement if the restaurant is closed. Franchisees typically have a period to 'cure' or fix other types of defaults, but this is not the case for closing the restaurant. This could occur due to financial difficulties, operational issues, or other unforeseen circumstances.
The FDD outlines the franchisee's obligations upon termination, which include immediately ceasing operation of the Cicis restaurant, stopping the use of Cicis's marks and confidential information, canceling any assumed name registrations containing any mark, ceasing to identify the business as associated with the Cicis brand, paying all outstanding amounts due to Cicis and its affiliates (including enforcement costs), returning the manual and other confidential information without retaining copies, and complying with non-compete covenants. Therefore, franchisees need to be aware of the serious consequences of closing their restaurant, even temporarily, without explicit permission or a valid reason covered by the Reopen Incentive Addendum.