Under what circumstances is Cicis not indemnified during interim management of a restaurant after the death or disability of the owner?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
We may (but are not obligated to) assume such interim management of your Restaurant; provided that (i) our interim management of your Restaurant will not relieve you of your obligations under this Agreement; (ii) we will not be liable for any debts, losses, costs, or expenses incurred in the operation of your Restaurant during any such period of interim management; (iii) we will have the right to charge a reasonable fee for our management services, plus the direct out-of-pocket costs and expenses incurred in the operation of the Restaurant; and (iv) you will, and hereby do, indemnify and hold us harmless against any and all judgments, fines, losses, liabilities, costs, amounts paid in settlement, and reasonable expenses (including, but not limited to attorneys' fees) incurred in connection with our interim management of your Restaurant, except by reason of our gross negligence or willful misconduct.
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, Cicis will not be indemnified if their own actions during the interim management of a restaurant following the death or permanent disability of the owner are the cause of certain issues. Specifically, Cicis will not be held harmless against judgments, fines, losses, liabilities, costs, settlement payments, and reasonable expenses, including attorney's fees, if these are incurred due to Cicis's gross negligence or willful misconduct during their management of the restaurant.
This means that while Cicis can step in to manage a restaurant temporarily after the owner's death or disability, the franchisee's estate is generally responsible for covering any liabilities incurred during this period. However, there's a significant exception: if Cicis's own actions are grossly negligent or intentionally harmful, they become responsible for the resulting financial consequences.
For a prospective Cicis franchisee, this clause highlights the importance of understanding the terms of interim management. While Cicis taking over management can provide stability during a difficult time, it's crucial to recognize that the franchisee's estate remains financially responsible unless Cicis is directly at fault through gross negligence or willful misconduct. This provision encourages Cicis to act responsibly during interim management, as they cannot rely on indemnification for their own serious errors or intentional misdeeds.