What obligations survive termination of the Cicis Franchise Agreement under the Underperforming Incentive Program?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Termination; Lost Revenue Damages. Provided you and your affiliates have been in Good Standing from the Effective Date and remain so during the notice period specified below, you may, at any time prior to [insert date that is the 18-month anniversary of the Effective Date], and without cause, deliver (as defined in the Franchise Agreement) a written notice to us of your election to terminate the Franchise Agreement. Termination will be effective at the close of business on the 30th day following delivery of your written notice of termination, and you will thereafter be required to comply with all obligations under the Franchise Agreement that are either triggered by or that expressly or by implication survive termination (except the obligation to pay Lost Revenue Damages under Section 16.M of the Franchise Agreement).
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to the 2025 Cicis Franchise Disclosure Document, when a franchisee participates in the Underperforming Incentive Program and terminates the Franchise Agreement, they are still required to comply with certain obligations. Specifically, the franchisee must adhere to all obligations that are either triggered by the termination or that expressly or implicitly survive the termination of the agreement. However, there is an exception to this rule: the franchisee is not obligated to pay Lost Revenue Damages as outlined in Section 16.M of the Franchise Agreement.
This means that even after terminating the agreement under the Underperforming Incentive Program, a former Cicis franchisee must still fulfill duties such as those related to non-disparagement, non-competition, confidentiality, and indemnification, as these are designed to continue even after the agreement ends. These continuing obligations protect Cicis's brand and business interests, even after a franchise location closes.
It is important to note that the ability to terminate the Franchise Agreement under the Underperforming Incentive Program, without cause, is contingent upon the franchisee and their affiliates remaining in Good Standing from the Effective Date of the addendum through the notice period. Good Standing is defined as being compliant with all agreements with Cicis and its affiliates, including timely satisfaction of all monetary obligations.
Prospective Cicis franchisees should carefully review the Franchise Agreement and the Underperforming Incentive Program Addendum to fully understand which obligations survive termination and the conditions under which they can terminate the agreement without incurring Lost Revenue Damages. Understanding these post-termination obligations is crucial for making an informed decision about investing in a Cicis franchise.