What is the obligation of the franchisee regarding opening Cicis restaurants during each Development Period?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
l documents regarding your formation, existence, standing, and governance.
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C. MINIMUM LIQUIDITY.
We have entered into this Agreement based, in part, on your representations to us about, and our assessment of, your levels of liquidity as of the Effective Date. You will ensure that, throughout the Term, you will maintain sufficient liquidity to meet your obligations under this Agreement. We reserve the right to establish, from time to time, specific reasonable liquidity thresholds, taking into consideration, your obligations under this Agreement, and you agree to comply with any such requirements that we impose.
2. THE DEVELOPMENT RIGHTS.
A. GRANT.
Subject to the terms and limitations contained herein, we grant you the Development Rights. You accept and agree to exercise the Development Rights in strict accordance with the terms and conditions contained in this Agreement. You acknowledge and agree that, as described further in this Agreement:
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- the Development Rights may only be exercised by the execution by us and you or your Affiliate that we approve of our then-current form of Franchise Agreement which, except as expressly provided in this Agreement, may be materially different than the form of Franchise Agreement we are using to grant Franchises on the Effective Date;
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- the Development Rights may only be exercised with respect to Restaurants to be located in the Development Area identified on Attachment A (the "Development Area");
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- you or your approved Affiliate will develop and open Restaurants, in each case pursuant to the applicable Franchise Agreement but as necessary to satisfy the minimum opening requirements of each of the time periods (each a "Development Period") that comprise the overall development schedule described in Attachment A hereto (the "Development Schedule"); and
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Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, a franchisee with Development Rights must adhere to a specific development schedule. The franchisee or their approved affiliate is required to develop and open Cicis restaurants according to the terms of the Franchise Agreement. These openings must satisfy the minimum requirements for each Development Period, as outlined in the Development Schedule attached to the agreement.
The Development Schedule specifies the number of restaurants the franchisee is expected to open within defined timeframes (Development Periods). The franchisee's ability to exercise their Development Rights is contingent upon meeting these minimum opening requirements. The Development Rights are valid from the Effective Date of the agreement until either the date the last required restaurant opens or the last day of the final Development Period, whichever comes first.
The FDD emphasizes that Cicis relies on the franchisee's expertise in their Development Area and their independent assessment of its potential to support the number of restaurants specified in the Development Schedule. Cicis does not guarantee the area can support the number of restaurants outlined in the schedule, placing the onus on the franchisee to conduct thorough due diligence. The franchisee must faithfully, honestly, and diligently perform their obligations under the Development Agreement and fully exploit the Development Rights throughout the entire Development Area during the Term.