Must the transferee of a Cicis franchise execute Cicis' then-current standard form of franchise agreement?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
he transferee must enter into a written agreement, in form and substance satisfactory to us, assuming full, unconditional, joint and several liability for, and agreeing to perform from the date of the transfer, all obligations, covenants, and agreements contained in this Agreement; and, if the transferee is a legal entity, each of the transferee's owners as we designate must execute such agreement and jointly assume and guarantee the entity's performance of all such obligations, covenants, and agreements;
- (e) the transferee must execute, for a term ending on the expiration date of this Agreement and with such renewal terms as may be provided by this Agreement, our thencurrent standard form of franchise agreement and all other ancillary agreements as we may require, which agreements will supersede this Agreement and its ancillary documents in all respects and the terms of which agreements may differ from the terms of this Agreement, including a higher percentage Royalty Fee and Fund Contribution or expenditure requirement; provided, however, that the transferee will not be required to pay any initial franchise fee; and, if the transferee is legal entity, such of transferee's owners as we may designate must execute such agreement and jointly assume and guarantee the entity's performance of all such obligations, covenants, and agreements;
- (f) the transferee must demonstrate to our satisfaction that it meets the criteria we then consider when reviewing a prospective franchisee's application for a Franchise;
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to Cicis' 2025 Franchise Disclosure Document, a transferee of a Cicis franchise must execute the then-current standard form of the franchise agreement. This agreement will have a term ending on the original agreement's expiration date, including any renewal terms. This new agreement supersedes the original franchise agreement in all respects.
This means the terms of the new agreement may differ from the original, potentially including higher royalty fees or fund contribution requirements. However, the transferee is not required to pay an initial franchise fee. Additionally, Cicis may require designated owners of the transferee (if the transferee is a legal entity) to execute the agreement and guarantee the entity's performance.
In addition to executing the new franchise agreement, the transferee must also meet Cicis' current criteria for prospective franchisees. The transferee is responsible for renovating and upgrading the restaurant to meet the then-current system standards within a timeframe specified by Cicis. The transferee and any individuals required to complete training programs must also complete these programs at their own expense.