What are the requirements a Cicis franchisee must meet to transfer their Area Development Agreement?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in | Summary | |
|---|---|---|---|
| Area Development Agreement – Section 5.C. | Franchise or other Agreement | You must (i) pay all amounts due us and our affiliates and third- party vendors; (ii) not be in default; (iii) provide us all information and documents we reasonably request including copies of all agreements executed in relation to transfer; (iv) execute a general release; (v) remain liable for pre-transfer obligations; (vi) pay or caused to be paid a transfer fee; and (vii) execute a non-compete agreement. Transferee must (i) meet our criteria; (ii) assume post-transfer obligations; and (iii) execute our then-standard Area Development Agreement. | |
| n. Franchisor’s right of first refusal to acquire franchisee’s business | Franchise Agreement – Section 13.C. Area Development Agreement – Section 5.F. | Within 30 days after notice, we have the option to purchase the transferred interest on the same terms and conditions offered by a third party. Within 30 days after notice, we have the option to purchase the transferred interest on the same terms and conditions offered by a third party. |
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, a franchisee seeking to transfer their Area Development Agreement must meet several requirements. The franchisee must (i) pay all amounts due to Cicis, its affiliates, and third-party vendors; (ii) not be in default of the agreement; (iii) provide all requested information and documents, including copies of all agreements related to the transfer; (iv) execute a general release; (v) remain liable for pre-transfer obligations; (vi) pay or cause to be paid a transfer fee; and (vii) execute a non-compete agreement.
In addition, the prospective transferee must also meet specific criteria. The transferee must (i) meet Cicis's criteria for new franchisees; (ii) assume all post-transfer obligations under the Area Development Agreement; and (iii) execute Cicis's then-standard Area Development Agreement. These stipulations ensure that any new developer is fully vetted and committed to upholding the standards and obligations of the Cicis franchise system.
Cicis also retains the right of first refusal to acquire the franchisee's interest. Within 30 days after receiving notice of a proposed transfer, Cicis has the option to purchase the interest on the same terms and conditions offered by a third party. This provision allows Cicis to maintain control over its development territories and ensure that transfers align with its strategic interests. This is a fairly common practice in franchising, allowing the franchisor to control who enters the system and prevent unwanted third parties from acquiring development rights.