Does Cicis have any restrictions on transferring its rights under the Franchise Agreement?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise or other Agreement | Summary | |
|---|---|---|---|
| j. | Assignment of contract by franchisor | Franchise Agreement - Section 13.A. Area Development Agreement - Section 5.A. | We may transfer our rights without restriction. We may transfer our rights without restriction. |
| k. | "Transfer" by franchisee – defined | Franchise Agreement - Sections 13.B. Area Development Agreement - Sections 5.B. | Includes transfer, assignment, sale, conveyance, gift, pledge, mortgage, or other forms of disposal of the rights under the Franchise Agreement or ownership interest in you, and/or the transfer, surrender, or loss of the possession, control, or management of your Restaurant. Includes transfer, assignment, sale, conveyance, gift, pledge, mortgage, or other forms of disposal of the rights under the Area Development Agreement or ownership interest in you, and/or the transfer, surrender, or loss of the possession, control, or management of any Restaurant developed pursuant to the Area Development Agreement. |
| l. | Franchisor approval of transfer by | Franchise Agreement - Section 13.B.(1) | We have the right to approve all transfers by you or your owners but will not unreasonably withhold or delay approval. |
| franchisee | Area Development Agreement Section 5.C | You cannot assign or transfer without first obtaining our written consent. | |
| m. | Conditions for franchisor approval of transfer | Franchise Agreement - Section 13.B. | You must (i) pay all amounts due our affiliates, us or third-party vendors; (ii) not be in default; (iii) execute a general release; (iv) remain liable for pre-transfer obligations; (v) pay or cause us to be paid a transfer fee; (vi) comply and cause your other owners and their family members to comply with the post termination non-compete covenants; and (vii) provide us all information and documents we reasonably request including copies of all agreements executed in relation to proposed transfer. Transferee must (i) meet our criteria; (ii) upgrade the Restaurant to then-current standards; (iii) execute a current Franchise Agreement and other agreements; and (iv) complete our then-current training program. |
| Provision | Section in Franchise or other Agreement | Summary | |
| ---- | ---------------------------------------------- | ------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
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, Cicis, as the franchisor, faces no restrictions on transferring its rights under both the Franchise Agreement and the Area Development Agreement. This is explicitly stated in Item 17, which addresses renewal, termination, transfer, and dispute resolution. This lack of restriction provides Cicis with significant flexibility in managing and potentially restructuring its franchise network.
For a prospective franchisee, this means that Cicis could transfer its rights to another entity without needing the franchisee's consent or approval. This could lead to changes in the management, policies, or strategic direction of the franchise system. While the new entity would be bound by the existing Franchise Agreement, the franchisee would need to adapt to any operational or strategic shifts implemented by the new franchisor.
In contrast, franchisees face several conditions and restrictions when transferring their rights. Cicis retains the right to approve all transfers by franchisees or their owners, and this approval will not be unreasonably withheld or delayed. This ensures that Cicis maintains control over who enters the franchise system and that the new franchisee meets their standards. Franchisees must meet several conditions to gain approval for a transfer, including settling all outstanding debts, not being in default, executing a general release, remaining liable for pre-transfer obligations, paying a transfer fee, complying with post-termination non-compete covenants, and providing all necessary information and documents related to the transfer. The prospective transferee must also meet Cicis's criteria, upgrade the restaurant to current standards, execute a current Franchise Agreement and other agreements, and complete the then-current training program.