What is the 'Option Period' defined as in the Cicis franchise agreement regarding death or disability?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
- (3) Anything contained in this Section 13.D to the contrary notwithstanding, upon your or your Managing Owner's death or permanent disability, we (or our designee) will have the option, to be exercised in writing within 20 days from the date we receive notice of the death or permanent disability pursuant to Section 13.D.(2) ("Option Period"), to elect to purchase your interest and/or the Managing Owner's interest in this Agreement, your Restaurant, or you, as applicable, as well as the further option to elect to purchase the interest of any other of your Owners (individually, "Interest" and collectively, "Interests") at the price and upon the terms set forth below.
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, the Option Period is defined in the context of the franchisor's right to purchase the franchisee's interest in the event of death or permanent disability. Specifically, Cicis has an Option Period of 20 days to decide whether to purchase the franchisee's interest. This 20-day period begins from the date Cicis receives written notice of the franchisee's or their Managing Owner's death or permanent disability.
During this Option Period, Cicis has the right to elect to purchase the franchisee's interest, the Managing Owner's interest, or the interests of any other owners in the franchise agreement. The purchase price during this period will be determined with reference to the Agreed Value of the restaurant. If the franchisee is a natural person, the Agreed Value will be 100% of the Agreed Value. If the franchisee is a legal entity, the purchase price for any interest will be proportional to the interest of the person whose interests are being purchased relative to the total ownership interests.
This clause is important for prospective Cicis franchisees as it outlines the procedure and timeline Cicis will follow if the franchisee or managing owner dies or becomes permanently disabled. It gives Cicis a relatively short window to decide whether to purchase the franchise, which can provide some certainty to the franchisee's estate or family. However, the valuation method and the potential for Cicis to assume liabilities should be carefully considered to understand the financial implications of such a purchase.