What is the required action regarding Affiliates signing Franchise Agreements under the Cicis Development Rights agreement?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
Subject to the terms and limitations contained herein, we grant you the Development Rights. You accept and agree to exercise the Development Rights in strict accordance with the terms and conditions contained in this Agreement. You acknowledge and agree that, as described further in this Agreement:
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- the Development Rights may only be exercised by the execution by us and you or your Affiliate that we approve of our then-current form of Franchise Agreement which, except as expressly provided in this Agreement, may be materially different than the form of Franchise Agreement we are using to grant Franchises on the Effective Date;
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- the Development Rights may only be exercised with respect to Restaurants to be located in the Development Area identified on Attachment A (the "Development Area");
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- you or your approved Affiliate will develop and open Restaurants, in each case pursuant to the applicable Franchise Agreement but as necessary to satisfy the minimum opening requirements of each of the time periods (each a "Development Period") that comprise the overall development schedule described in Attachment A hereto (the "Development Schedule"); and
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- the Development Rights may be exercised from the Effective Date and, unless this Agreement is sooner terminated as provided herein, continuing through the earlier of (1) the date on which the last Restaurant which is required to be opened in order to satisfy the Development Schedule opens for regular business or (2) the last day of the last Development Period of the Development Schedule (the "Term")
You agree to, at all times, faithfully, honestly and diligently perform your obligations under this Agreement and to fully exploit the Development Rights during the Term and throughout the entire Development Area. Except for having your Affiliates that we approve sign Franchise Agreements, you may not subcontract or delegate any of your rights or obligations under this Agreement to any third parties.
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, if a franchisee has Development Rights, any Affiliate that Cicis approves can sign Franchise Agreements. Specifically, the franchisee cannot delegate these rights to anyone else other than approved Affiliates.
This means that while a franchisee with Development Rights can utilize affiliated entities to fulfill the obligations of opening and operating Cicis restaurants, they cannot simply subcontract or transfer these responsibilities to unaffiliated third parties. Cicis retains control over who ultimately becomes a franchisee within the development area.
This requirement ensures that Cicis maintains standards and control over its brand, even when Development Rights are granted. The franchisee remains responsible for ensuring that any Affiliate adheres to the Franchise Agreement. This also allows Cicis to vet and approve any Affiliate to ensure they meet the brand's standards.