What topics are covered under Section 5 of the Cicis Area Development Agreement?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
5. TRANSFER.
A. BY US.
We have the right to delegate the performance of any portion or all of our rights and obligations under this Agreement to third-party designees. You represent that you have not signed this Agreement in reliance on any particular person or entity remaining with us in any capacity. We may change our ownership or form or assign this Agreement and any other agreement to a third party without restriction.
B. BY YOU OR YOUR OWNERS.
Your rights and duties under this Agreement are personal to you (or your owners if you are a Business Entity), and we have granted you the Development Rights in reliance upon our perceptions of your (or your owners') individual or collective character, skill, aptitude, attitude, business ability, and financial capacity. Accordingly, neither you nor any owners, nor any of your or their permitted successors or assigns, shall sell, assign, transfer, convey, give away, pledge, mortgage, or otherwise dispose of or encumber this Agreement (or any direct or indirect interest
in this Agreement), the Development Rights, or any direct or indirect ownership interest in you (regardless of its size) (each, a "Transfer"), without our prior written consent. Any Transfer without our prior written approval is a material breach of this Agreement and has no effect. We may reject any request to consent to the use of the Development Rights or this Agreement as collateral for the repayment of any loan.
If you intend to list your Development Rights for sale with any broker or agent, you shall do so only after obtaining our written approval of the broker or agent and of the listing agreement and any advertising materials. You may not use any Mark in advertising the transfer or sale of your Development Rights or of any ownership in you without our prior written consent.
C. CONDITIONS FOR APPROVAL OF TRANSFER.
We may consider, and you will provide or assist us in compiling, any information we deem necessary or appropriate in connection with our assessment of a proposed Transfer. If we elect to approve a proposed Transfer, we may, at our discretion, condition our approval in any manner we deem necessary and appropriate to protect the Cicis brand and our interests in the System and this Agreement, including any of the following (each of which you agree is reasonable):
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to the 2025 Cicis Franchise Disclosure Document, Section 5 of the Area Development Agreement pertains to the transfer of rights and obligations under the agreement. This section is divided into three subsections addressing transfer by Cicis, transfer by the developer or their owners, and conditions for approval of a transfer.
Specifically, Cicis retains the right to delegate its obligations to third parties and to transfer the agreement without restriction. This means a developer cannot rely on any specific person or entity remaining with Cicis. On the other hand, the developer's rights and duties are personal, based on Cicis's assessment of their character, skills, and financial capacity. Therefore, the developer cannot transfer the agreement, development rights, or ownership interest without Cicis's prior written consent. Any unauthorized transfer constitutes a material breach of the agreement.
If a developer intends to sell their development rights, they must first obtain Cicis's approval of the broker or agent and the listing agreement. Cicis may also impose conditions on any approved transfer to protect the Cicis brand and the integrity of its system. These conditions are deemed reasonable and could include various requirements to ensure the continued success and quality of the franchise system.