What is the purpose of the 'Provision' column in the Cicis FDD Item 17 table?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise or other Agreement | Summary | |
|---|---|---|---|
| o. | Franchisor's option to purchase franchisee's business | Franchise Agreement – Section 13.D.(3) and Section 16.J Area Development Agreement | 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 elect to purchase your interest and/or the Managing Owner's interest in your Cicis Restaurant. If the triggering death or permanent disability occurs within (i) 6 months following the opening date of your Cicis Restaurant, then the purchase price will be an amount equal to your Original Cost (defined in the Franchise Agreement), plus 10%; (ii) 6 to 12 months following the opening date of your Cicis Restaurant, then the purchase price will be an amount equal to the Net Sales of your Cicis Restaurant for the 5-month period immediately preceding the month in which the death or permanent disability occurs, annualized, then divided by 2; and (iii) 12 months following the opening date of your Cicis Restaurant, then the purchase price will be an amount equal to the total Net Sales of your Cicis Restaurant for the 12-month period immediately preceding the month in which the death or permanent disability occurs, divided by 2. On expiration (without renewal) or termination of your Franchise Agreement, we will have the option to purchase the assets of your Cicis Restaurant at fair market value by providing you with written notice of our election within 30 days following expiration or termination of this Agreement and will pay 10% of the purchase price upon the closing of the purchase transaction and the remainder purchase price in 60 equal monthly installments of principal plus interest at a rate of interest per annum equal to the prime lending rate charged by Wells Fargo National Association or its successors in interest, determined as of the closing date with annual adjustments based on the prime rate charged on each anniversary date. Not applicable |
| p. | Death or disability of franchisee | Franchise Agreement - Section 13.D. | In case of your or your Managing Owner's death, your or their interests, in your Cicis Restaurant must be transferred to a third party we approve within 12 months after the date of death or permanent disability. If you or, as applicable, any of your Managing Owner should become permanently disabled, we may, in our sole discretion, require such interests to be transferred to a third party within 6 months after notice to you. We may assume management of your Cicis Restaurant pending the transfer. |
| Provision | Section in Franchise or other Agreement | Summary | |
| ---- | ---------------------------------------------------------------------------------------- | ------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| Area | Not applicable | ||
| Development | |||
| Agreement | |||
| q. | Non-competit ion covenants during the term of the franchise | Franchise Agreement - Section 9.C(1) and 9.C.(3) | Except as we otherwise approve in writing, neither you nor any of your direct or indirect owners and Operator (and members of their immediate family) may: (i) divert, or attempt to divert, any business or customer of your Cicis Restaurant; (ii) operate a Competing Business except with respect to other Cicis Restaurants operated under valid franchise agreements with us; or (iii) interfere with our relationships with any supplier to Cicis Restaurants or injure the goodwill associated with the Marks and the System. A "Competing Business" is a business that (i) derives more than 50% of its revenue from selling pizza (including fresh, frozen, or unbaked pizza) using the distribution methods (including dine-in, carry-out, catering, or delivery) we authorize, (ii) functions as a commissary to sell or lease to or supply any such business, or (iii) grants franchises or licenses for or provides services to any of the foregoing. |
| Area | Not applicable | ||
| Development | |||
| Agreement | |||
| r. | Non-competit ion covenants after the franchise is terminated or expires | Franchise Agreement - Section 9.C.(2), 9.C.(3), and 16.H | For a period of 2 years neither you nor any of your direct or indirect owners and Operator (and members of their immediate family) may engage in any of the activities described in Item 17(q) above, for any Competing Business: (i) at the Location; (ii) within the Protected Area; (iii) within the Development Area (if applicable); or (iv) within a 10-mile radius of the above or any Cicis branded food service facility in existence or under construction. |
| Area | Not applicable | ||
| Development | |||
| Agreement | |||
| s. | Modification of the agreement | Franchise Agreement – Sections 6.C. and 17.B. | May not be amended or modified except in a writing signed by parties. However, we may amend the System Standards and Manuals from time to time (subject to applicable laws). |
| Area Development Agreement - Section 10.A | May not be amended or modified except in a writing signed by parties. However, we may amend the System Standards and Manuals from time to time (subject to applicable laws). |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 45–53)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, the 'Provision' column in Item 17 outlines specific clauses or conditions related to the franchise agreement. These provisions cover various aspects of the franchise relationship, such as the franchisor's option to purchase the franchisee's business, actions to be taken in the event of the franchisee's death or disability, non-competition covenants, and the process for modifying the agreement.
The 'Provision' column is crucial for prospective Cicis franchisees as it highlights key terms that govern the franchise relationship beyond the standard operational procedures. For example, it details the circumstances under which Cicis might repurchase the restaurant, such as the death or disability of the franchisee, and the formulas used to determine the purchase price. It also clarifies the restrictions on the franchisee's ability to operate a competing business during and after the franchise term.
Understanding these provisions is essential for franchisees to assess their rights and obligations under the franchise agreement. The provisions related to death or disability, for instance, dictate how the franchise will be handled, ensuring business continuity and providing a financial framework for the transfer of ownership. Similarly, the non-competition clauses define the scope of activities a franchisee is restricted from engaging in, protecting Cicis's market share and brand integrity.
The modification provision is also important, as it specifies that changes to the agreement must be in writing and signed by both parties, although Cicis retains the right to amend the System Standards and Manuals. By carefully reviewing the 'Provision' column, potential franchisees can gain a comprehensive understanding of the contractual terms that could significantly impact their investment and business operations.