Is a transfer fee required to transfer a Cicis 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 transfer fee is required to transfer an Area Development Agreement. To transfer the agreement, the area developer must pay all amounts due to Cicis and its affiliates and third-party vendors, not be in default, provide all requested information and documents including copies of all agreements executed in relation to the transfer, execute a general release, remain liable for pre-transfer obligations, pay or cause to be paid a transfer fee, and execute a non-compete agreement.
Furthermore, the transferee must meet Cicis's criteria, assume post-transfer obligations, and execute Cicis's then-standard Area Development Agreement. Cicis also retains the right of first refusal to acquire the transferred interest on the same terms and conditions offered by a third party. This means that before an area developer can transfer their agreement to someone else, Cicis has the option to purchase the agreement themselves under the same terms offered by the potential buyer.
These transfer conditions are fairly standard in franchising. The transfer fee compensates Cicis for their time and expenses in reviewing and approving the transfer. The other conditions ensure that the transferee is qualified to operate the business and that Cicis's interests are protected. The right of first refusal allows Cicis to maintain control over who becomes an area developer in their system.