Is Cicis obligated to compensate a franchisee if they solicit customers within the franchisee's Development Area?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding the foregoing, we reserve for ourselves and our Affiliates all rights not expressly granted to you in this Agreement and the right to do all things that we do not expressly agree in this Agreement not to do. Without limitation and without regard to proximity to your Development Area, and without any obligation to compensate you, we and our Affiliates reserve the right, on such terms and conditions as we deem appropriate, ourselves or through authorized third parties (including our Affiliates), to:
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- solicit customers, advertise, and authorize others to advertise, and promote sales of and from Cicis Restaurants, and fill customer orders by providing catering and delivery services anywhere, including within the Development Area; and
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- market and sell, and grant to others the right to market and sell, within and outside of the Development Area, products and services authorized for sale at Cicis Restaurants through alternative channels of distribution such as Internet, catalog sales, telemarketing, or other direct marketing sales (like grocery stores, kiosks, mail order, Internet merchandise sales and catalogue sales, or through Cicis To Go) using the Marks or other trademarks and commercial symbols.
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, Cicis retains the right to solicit customers within a franchisee's Development Area without any obligation to compensate the franchisee. Cicis reserves the right to solicit customers, advertise, and authorize others to advertise and promote sales from Cicis Restaurants, including catering and delivery services, anywhere, even within the franchisee's Development Area. This means that Cicis can actively pursue customers within the area granted to a franchisee without having to provide any financial compensation to the franchisee for those activities.
This reservation of rights extends to various methods of customer solicitation and sales promotion. Cicis can market and sell products and services authorized for sale at Cicis Restaurants through alternative channels of distribution, such as the Internet, catalog sales, telemarketing, or other direct marketing sales (like grocery stores, kiosks, mail order, Internet merchandise sales, and catalog sales, or through Cicis To Go). These activities can occur both within and outside the Development Area, giving Cicis broad latitude in how it reaches customers.
For a prospective Cicis franchisee, this means that while they are granted a Development Area, Cicis can still directly compete for customers within that area through various means without any obligation to share revenue or provide compensation. This is a significant consideration for potential franchisees as it could impact their expected sales and profitability. It is important to understand the extent to which Cicis intends to exercise these rights and how it might affect the franchisee's business. Franchisees should inquire about Cicis's specific plans for alternative distribution channels and marketing activities within their Development Area to fully assess the potential impact on their investment.