Regarding the Cicis Area Development Agreement and Franchise Agreement, will Cicis enforce the termination provision upon franchisee bankruptcy in Maryland, considering federal bankruptcy law?

According to the 2025 Cicis Franchise Disclosure Document, the enforceability of termination provisions upon franchisee bankruptcy in Maryland is addressed in state-specific riders to both the Area Development Agreement and the Franchise Agreement. For franchisees in Maryland, Cicis includes a statement clarifying that the termination provision related to bankruptcy might not be enforceable under federal bankruptcy law (11 U.S.C. Sections 101 et seq.). However, Cicis states that it will enforce the provision to the extent enforceable. This indicates that while Cicis retains the right to attempt to terminate the agreement, federal bankruptcy law could override this provision, offering some protection to the franchisee. This disclosure is added to the "Summary" section of Item 17.f., entitled "'Cause' defined - defaults which cannot be cured".

This disclosure serves as a cautionary note to prospective Cicis franchisees in Maryland, highlighting the potential conflict between the franchise agreement's termination clauses and federal bankruptcy law. It suggests that the franchisee's rights and obligations in the event of bankruptcy will be determined by the courts, considering the interplay between the agreement and federal statutes. The franchisee should be aware that while Cicis intends to enforce the termination provision to the extent possible, the ultimate decision will depend on the specific circumstances and the interpretation of federal law.

It is advisable for potential Cicis franchisees in Maryland to seek legal counsel to fully understand the implications of these provisions. Specifically, franchisees should discuss with their attorneys the potential scenarios under which the termination clause might be invoked, the protections afforded by federal bankruptcy law, and the likely outcome of any legal challenges. This due diligence will help the franchisee make an informed decision about entering into the franchise agreement and prepare for potential financial difficulties.