Who is responsible for reimbursing Cicis for costs incurred in enforcing the Guaranty?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
The provisions contained in Section 9 (Enforcement) of the Agreement, including Section 9.A (Jurisdiction and Venue), Section 9.B (Governing Law) and Section 9.E (Costs and Attorneys' Fees) of the Agreement are incorporated into this Guaranty by reference and shall govern this Guaranty and any disputes between the Guarantors and us. The Guarantors shall reimburse us for all costs and expenses we incur in connection with enforcing the terms of this Guaranty.
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to the 2025 Cicis Franchise Disclosure Document, the Guarantors are responsible for reimbursing Cicis for all costs and expenses Cicis incurs in connection with enforcing the terms of the Guaranty. This means that if Cicis has to take legal action to enforce the Guaranty, the individuals or entities that have guaranteed the obligations of the franchisee will be responsible for covering Cicis's legal fees and other associated costs.
This provision is significant for potential Cicis franchisees because it highlights the importance of understanding the Guaranty and the financial obligations it entails. If a franchisee defaults on their obligations, the Guarantors will not only be responsible for the original debt but also for any legal costs Cicis incurs in pursuing enforcement. This could create a substantial financial burden for the Guarantors.
It is common practice in franchising for franchisors to seek guarantees, especially from individuals or entities affiliated with the franchisee. This helps to ensure that the franchisor has recourse in the event of a default. The reimbursement of enforcement costs is also a standard provision, as it protects the franchisor from incurring losses due to legal action necessary to recover what is owed. Prospective franchisees and their guarantors should carefully review the Guaranty and understand the full extent of their financial exposure before signing any agreements with Cicis.