Under what circumstances is Cicis liable for losses incurred during interim management of a Cicis restaurant?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
At our request, within a reasonable period of time not to exceed seven (7) days from the date of death or permanent disability, the executor, administrator, or other personal representative of the deceased or disabled person will provide for interim management of your Restaurant until such time as a transfer has been effected in accordance with the provisions of this Section 13.D.
Such interim management must be approved by us and must be conducted in accordance with the terms of this Agreement.
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 may, but is not obligated to, assume interim management of a restaurant if the franchisee or managing owner dies or becomes permanently disabled. However, Cicis will not be liable for any debts, losses, costs, or expenses incurred during this period of interim management, except in cases of gross negligence or willful misconduct on the part of Cicis.
In the event that Cicis does manage the restaurant during this interim period, the franchisee remains responsible for their obligations under the franchise agreement. Cicis also has the right to charge a reasonable fee for their management services, in addition to covering the direct out-of-pocket costs and expenses related to operating the restaurant. The franchisee must also indemnify and hold Cicis harmless from any judgments, fines, losses, liabilities, costs, amounts paid in settlement, and reasonable expenses, including attorney's fees, unless these arise due to Cicis's gross negligence or willful misconduct.
This arrangement is fairly typical in franchising, as it protects the franchisor from liabilities while ensuring the continued operation of the business. The franchisee or their estate remains ultimately responsible for the restaurant's performance and any associated costs, except where Cicis is directly at fault through gross negligence or willful misconduct.
For a prospective Cicis franchisee, this means understanding that while Cicis may step in to manage the restaurant temporarily in certain circumstances, the financial responsibility largely remains with the franchisee, unless Cicis is grossly negligent or engages in willful misconduct. It is important to clarify what constitutes gross negligence or willful misconduct with legal counsel to fully understand the scope of this exception.