Is Cicis obligated to compensate me if they operate outside my Protected Area?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
We and our affiliates have and retain all rights within and outside the Protected Area that are not expressly and exclusively granted to you under the Franchise Agreement, without any obligation to compensate you and without regard to whether it competes with your Cicis Restaurant, including the right to do and to authorize others to do the following: (i) establish and operate Cicis Restaurants identified by the Marks at any location outside the Protected Area, including locations that are adjacent or proximate to the Protected Area and in any Reserved Area (defined below) whether within or outside the Protected Area, (ii) establish and operate restaurants under other trade names, service marks, and trademarks at any location within or outside of the Protected Area, (iii) establish and operate Cicis To Go Restaurants anywhere in world, including within the Protected Area, (iv) offer and sell, anywhere in the world (including within the Protected Area) any similar or dissimilar products and services, whether identified by the Marks or by other trademarks, trade names or service marks, through any channel or by any method of distribution other than a full-service Cicis Restaurant (including by or through a Cicis To Go Restaurant, the Internet or similar electronic, virtual, or digital medium), on any terms and conditions we deem appropriate, and (v) acquire, be acquired by, merge with, affiliate with or engage in any transaction with other businesses (whether competitive or not) located anywhere and, even if such businesses are located in the Protected Area, (x) convert the other businesses to the Cici's brand and allow them to operate as part of the System, and/or (y) permit the other businesses to continue to operate under another name and incorporate one or more elements of the System.
A "Reserved Area" is any enclosed area of retail sales establishments in excess of 250,000 square feet, food courts, airports, hospitals, cafeterias, commissaries, schools, hotels, office buildings and stadiums, arenas, ballparks, festivals, fairs, military bases and other mass gathering locations or events.
Source: Item 12 — TERRITORY (FDD pages 38–40)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, Cicis retains all rights within and outside a franchisee's Protected Area without any obligation to compensate the franchisee. This means Cicis can operate or authorize others to operate Cicis Restaurants outside the Protected Area, even if these locations are near the franchisee's territory, without providing any compensation. Cicis also reserves the right to establish restaurants under different brand names, operate Cicis To Go restaurants anywhere in the world, and offer similar or dissimilar products through various channels, including the internet, without compensating the franchisee.
This lack of obligation extends to Cicis's ability to engage in transactions with other businesses, even those located within the franchisee's Protected Area. Cicis can convert these businesses to the Cicis brand or allow them to incorporate elements of the Cicis system without any compensation to the franchisee. The FDD specifies that a "Reserved Area" includes large retail establishments, food courts, airports, hospitals, and other mass gathering locations, further emphasizing Cicis's broad rights outside the franchisee's Protected Area.
For a prospective franchisee, this means that while you are granted a Protected Area, Cicis maintains significant freedom to operate and authorize operations outside that area without any financial obligation to you. This could potentially lead to increased competition from other Cicis-branded or affiliated businesses, impacting your restaurant's revenue. It is important to understand the scope and limitations of your Protected Area and the potential for Cicis to operate nearby businesses that may draw customers away from your location. Franchisees should carefully consider these factors and conduct thorough market research to assess the potential impact of competition from other Cicis-related ventures.