Is the transferee required to execute the then-standard Area Development Agreement when taking over a Cicis franchise?
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. |
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 transferee taking over an Area Development Agreement must execute the then-standard Area Development Agreement. This requirement is part of the conditions Cicis places on the transfer of such agreements.
Specifically, for Cicis to approve the transfer, the transferee must meet certain criteria and assume post-transfer obligations. One of these obligations is the execution of the then-current Area Development Agreement. This ensures that the new area developer is bound by the most up-to-date terms and conditions that Cicis requires of its area developers.
This requirement is fairly standard in franchising, as franchisors typically want to ensure that anyone taking over a franchise or development agreement adheres to the current standards and obligations of the system. For a prospective transferee, this means being prepared to enter into a new agreement with terms that may differ from the original agreement. It is important to carefully review the new Area Development Agreement to understand all the obligations and responsibilities it entails.