Can Cicis operate within a Reserved 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 the right to establish and operate restaurants within Reserved Areas, even if those areas are within or outside a franchisee's Protected Area. A Reserved Area is defined as any enclosed retail space exceeding 250,000 square feet, food courts, airports, hospitals, cafeterias, commissaries, schools, hotels, office buildings, stadiums, arenas, ballparks, festivals, fairs, military bases, and other mass gathering locations. This means that even if a franchisee has a Protected Area, Cicis can still open or authorize other Cicis restaurants in these Reserved Areas, potentially creating competition for the franchisee.
This reservation of rights is significant for prospective franchisees because it limits the exclusivity of their Protected Area. While a franchisee may have some geographic protection, Cicis retains considerable freedom to operate in high-traffic locations that could draw customers away from the franchised restaurant. This is a common practice in franchising, where franchisors balance the need to provide franchisees with some territorial protection against the desire to expand the brand's presence in diverse locations.
Furthermore, Cicis also retains the right to establish and operate Cicis To Go Restaurants anywhere in the world, including within a franchisee's Protected Area. They can also offer and sell any products and services through any channel other than a full-service Cicis Restaurant, such as through a Cicis To Go Restaurant or the Internet. This further reduces the exclusivity of the Protected Area and allows Cicis to explore alternative distribution channels without being restricted by the franchisee's territory.
Therefore, a prospective Cicis franchisee should carefully consider the potential impact of these reserved rights on their restaurant's performance. Understanding the definition of Reserved Areas and the potential for competition from other Cicis outlets and distribution channels is crucial for assessing the viability of the franchise opportunity.