Under the Cicis Area Development Agreement, what are the franchisee's obligations regarding payments to the franchisor, affiliates, and third-party vendors during a transfer?
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 franchisee seeking to transfer their Area Development Agreement must meet certain financial obligations. Specifically, the franchisee must pay all amounts due to Cicis, its affiliates, and any third-party vendors before the transfer can be approved. This ensures that all outstanding debts related to the Area Development Agreement are settled before the new franchisee assumes control.
In addition to settling outstanding payments, the franchisee must not be in default of the Area Development Agreement. The franchisee is also required to provide all information and documents reasonably requested by Cicis, including copies of all agreements executed in relation to the transfer. This allows Cicis to fully assess the transfer and ensure that all necessary legal and financial aspects are properly addressed.
Furthermore, the franchisee must execute a general release, which typically releases Cicis from any claims or liabilities related to the transferred agreement. The franchisee also remains liable for any obligations that arose before the transfer. The franchisee is also obligated to pay or cause to be paid a transfer fee to Cicis. These conditions collectively ensure that Cicis's financial and legal interests are protected during the transfer process, and that the new franchisee is fully aware of their responsibilities and obligations under the Area Development Agreement.