Does the transferor of a Cicis franchise need to execute a general release of claims against Cicis?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
- (h) the transferor will remain liable for all of its obligations to us in connection with this Agreement and your Restaurant incurred prior to the effective date of the transfer and will execute any and all instruments we reasonably request to evidence such liability;
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to the 2025 Cicis Franchise Disclosure Document, a transferor of a Cicis franchise remains liable for all obligations to Cicis in connection with the Franchise Agreement and the restaurant incurred before the transfer date. The transferor must also execute any instruments that Cicis reasonably requests to evidence this liability. This means that even after a franchise is sold, the original franchisee is still responsible for any outstanding debts or unfulfilled obligations that occurred during their ownership.
This requirement protects Cicis from potential losses or liabilities that could arise from the previous franchisee's actions. It ensures that Cicis can still pursue legal action against the original franchisee for any breaches of contract or other issues that occurred before the transfer. The new franchisee is responsible for obligations from the date of transfer forward.
For a prospective Cicis franchisee looking to sell their business, this means they need to ensure all financial and contractual obligations are met before the transfer is finalized. Failure to do so could result in ongoing liability even after the sale. The franchisee should maintain thorough records and seek legal counsel to ensure a smooth and legally sound transfer process. They should also be aware that Cicis has the right to request specific instruments to document the transferor's ongoing liability, so they should be prepared to comply with these requests.