Can Cicis terminate the franchise agreement if the franchisee operates the Cicis restaurant at an unapproved location?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
vided us with certain supporting materials (the "Application Materials"). We are willing to grant your request on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of their respective undertakings and commitments set forth herein, the receipt and sufficiency of which are acknowledged, you and we agree as follows:
AGREEMENT
1. GRANT
A. Grant of Rights. In reliance on the Application Materials, we hereby grant you the right and license, and you hereby accept the right and obligation, to use the System (including the Marks) to develop, own and operate a Cicis Restaurant, of the type indicated on Attachment A or Attachment A-1 hereto, during the Term (defined below), at the Location (defined below), and strictly and solely in accordance with this Agreement. Your right and obligation to develop, own and operate a Cicis Restaurant is referred to herein as the "Franchise," and the Cicis Restaurant you develop and own under this Agreement is referred to herein as your "Restaurant."
B. Location; Protected Area and Reserved Rights.
(1) Your Restaurant may be developed and operated only at a location upon which you and we agree, in writing (the "Location"). If you and we have agreed upon the Location when this Agreement is executed, it is identified on Attachment A hereto. If you and we have not yet agreed upon the Location, it is your responsibility to secure our agreement as to your Location within 120 days following the Effective Date. You must, at your expense, find and propose to us a location within the geographic area described on Attachment A ("Designated Area") that you believe meets our then-current site criteria and to submit any information about the location that we request in order to assess your proposal. We may, but will not be required to, conduct an on-site inspection of your proposed location. Should we elect to do so, we will not charge you a fee for conducting the inspection, but you must reimburse all costs and expenses we incur in connection with the
inspection. If you choose to continue to pursue a proposed location and we determine that it is appropriate to conduct another on-site inspection, we reserve the right to charge a fee for, and you will reimburse us the costs and expenses associated with, each such inspection.
- (2) If you and we agree after the Effective Date that your proposed location will be the Location, you and we will identify it on Attachment A-1 hereto and will indicate on that attachment (a) whether your Restaurant will be operated as a Cicis Buffet Restaurant or as a Cicis To Go Restaurant, and (b) your Restaurant's Protected Area (defined below). You must sign and deliver to us Attachment A-1 within five (5) days of its delivery to you, failing which, we may revoke our acceptance of the proposed location. If you and we are unable to agree upon the proposed location, the type of Cicis Restaurant that will be developed, and the Protected Area, you must locate and propose to us a different location within the Designated Area. This Agreement does not grant you any exclusivity with respect to the Designated Area. Our willingness to agree to your proposed Location means only that it meets the criteria that we have established solely for our own purposes, which may be different than your own.
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to the 2025 Cicis Franchise Disclosure Document, operating a Cicis Restaurant at an unapproved location can lead to the termination of the franchise agreement. The agreement specifies that the restaurant must be developed and operated only at a location agreed upon in writing by both the franchisee and Cicis. This location is documented in Attachment A or A-1 of the franchise agreement. If a mutually agreeable location isn't secured within 120 days of the agreement's effective date, it becomes the franchisee's responsibility to find and propose a site within the designated area that meets Cicis's site criteria.
Cicis retains the right to inspect the proposed location to ensure it aligns with their standards. The franchisee is responsible for reimbursing Cicis for costs associated with these inspections, especially if multiple inspections are required. Attachment A-1 will specify whether the restaurant will be a Cicis Buffet Restaurant or a Cicis To Go Restaurant, along with the restaurant's protected area. The franchisee must return the signed Attachment A-1 within five days of receipt; failure to do so allows Cicis to revoke acceptance of the location.
Operating at an unapproved location constitutes a breach of the franchise agreement, potentially leading to termination if not rectified. Cicis also has the option to demand that the franchisee cease operations until the location issue is resolved or until Cicis decides to terminate the agreement. Upon termination, the franchisee must immediately stop operating as a Cicis Restaurant and discontinue using Cicis's trademarks and confidential information. Failing to de-identify the restaurant according to Cicis's standards allows Cicis to take corrective action at the franchisee's expense.
This location approval process is typical in franchising, as the site's suitability significantly impacts the restaurant's potential success and the brand's reputation. Prospective franchisees should carefully review the site selection criteria and approval process with Cicis to avoid future conflicts. Franchisees should also understand the implications of operating at an unapproved location, including the potential for termination and associated costs.