Under what circumstances can Cicis modify or terminate territorial rights instead of terminating the Franchise Agreement?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
If you or your Affiliates are in default of any provision of this Agreement or any Franchise Agreement executed pursuant hereto, we may, in our sole discretion, instead of terminating this Agreement terminate or modify any territorial rights or protection granted to you in Section 2.B. of this Agreement, reduce the size of your Development Area, reduce the number of Restaurants listed in the Development Schedule, and/or pursue any other remedy we may have at law or in equity. Our exercise of any of our options under this Section will not constitute a waiver by us to exercise our option to terminate this Agreement at any time with respect to a subsequent event of default of a similar or different nature and will not obligate us to refund any portion of the Development Fee.
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, Cicis has the right to modify or terminate a franchisee's territorial rights instead of terminating the entire Franchise Agreement if the franchisee or their affiliates are in default of any provision within the agreement or any other Franchise Agreement executed under it.
Specifically, Cicis retains sole discretion in deciding whether to terminate or modify territorial rights. Besides modifying or terminating territorial rights, Cicis can also reduce the size of a franchisee's Development Area or reduce the number of Restaurants listed in the Development Schedule. Cicis can also pursue any other legal or equitable remedy available to them.
It is important to note that Cicis's decision to exercise any of these options does not prevent them from terminating the Franchise Agreement later for a subsequent default, even if the default is similar to the first one. Furthermore, Cicis is not obligated to refund any portion of the Development Fee if they choose to modify or terminate territorial rights instead of terminating the agreement.