Under what conditions can Cicis approve or deny a transfer by a franchisee?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise or other Agreement | Summary | |
|---|---|---|---|
| j. | Assignment of contract by franchisor | Franchise Agreement - Section 13.A. Area Development Agreement - Section 5.A. | We may transfer our rights without restriction. We may transfer our rights without restriction. |
| k. | "Transfer" by franchisee – defined | Franchise Agreement - Sections 13.B. Area Development Agreement - Sections 5.B. | Includes transfer, assignment, sale, conveyance, gift, pledge, mortgage, or other forms of disposal of the rights under the Franchise Agreement or ownership interest in you, and/or the transfer, surrender, or loss of the possession, control, or management of your Restaurant. Includes transfer, assignment, sale, conveyance, gift, pledge, mortgage, or other forms of disposal of the rights under the Area Development Agreement or ownership interest in you, and/or the transfer, surrender, or loss of the possession, control, or management of any Restaurant developed pursuant to the Area Development Agreement. |
| l. | Franchisor approval of transfer by | Franchise Agreement - Section 13.B.(1) | We have the right to approve all transfers by you or your owners but will not unreasonably withhold or delay approval. |
| franchisee | Area Development Agreement Section 5.C | You cannot assign or transfer without first obtaining our written consent. | |
| m. | Conditions for franchisor approval of transfer | Franchise Agreement - Section 13.B. | You must (i) pay all amounts due our affiliates, us or third-party vendors; (ii) not be in default; (iii) execute a general release; (iv) remain liable for pre-transfer obligations; (v) pay or cause us to be paid a transfer fee; (vi) comply and cause your other owners and their family members to comply with the post termination non-compete covenants; and (vii) provide us all information and documents we reasonably request including copies of all agreements executed in relation to proposed transfer. Transferee must (i) meet our criteria; (ii) upgrade the Restaurant to then-current standards; (iii) execute a current Franchise Agreement and other agreements; and (iv) complete our then-current training program. |
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, Cicis has the right to approve or deny all transfers by a franchisee or their owners, but will not unreasonably withhold or delay approval. A franchisee cannot assign or transfer their rights without first obtaining written consent from Cicis.
For Cicis to approve a transfer, the franchisee must meet several conditions. The franchisee must (i) pay all amounts due to Cicis, its affiliates, or third-party vendors; (ii) not be in default; (iii) execute a general release; (iv) remain liable for pre-transfer obligations; (v) pay or cause to be paid a transfer fee; (vi) comply and ensure their owners and family members comply with post-termination non-compete covenants; and (vii) provide all reasonably requested information and documents, including copies of all agreements related to the proposed transfer.
Additionally, the transferee must also meet certain criteria. The transferee must (i) meet Cicis's criteria; (ii) upgrade the Restaurant to then-current standards; (iii) execute a current Franchise Agreement and other agreements; and (iv) complete Cicis's then-current training program. These conditions ensure that any transfer maintains the standards and financial health of the Cicis franchise system.
Cicis also has specific rights regarding the transfer of a franchisee's business. Cicis has the option to purchase the transferred interest on the same terms and conditions offered by a third party. This right of first refusal allows Cicis to maintain control over who enters the franchise system and ensures that the terms of the transfer are beneficial to Cicis.