Under what conditions can Cicis withhold consent to a transfer by a franchisee?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
By You and Your Owners.
The rights and duties set forth in this Agreement are personal to you, and we have entered into this Agreement in reliance on your representations as to your and, if applicable, your Owners' business skill, financial capacity, and personal character.
Accordingly, neither you nor any of your Owners, nor any of your or their successors or assigns, will (i) sell, assign, transfer, convey, give away, pledge, mortgage, or otherwise dispose of or encumber any direct or indirect rights under or interest in this Agreement, in your Restaurant (or its assets), in you, and/or (ii) transfer or surrender the possession, control, or management of your Restaurant (each a "Transfer") without our prior written consent.
Any purported Transfer, by operation of Law or otherwise, made in violation of this Agreement will be null and void.
(1) We will not unreasonably withhold our consent to a Transfer, but we may require satisfaction of certain conditions and otherwise reasonably qualify our consent, including in respect of the following (each of which you agree is reasonable):
(a) all monies owed to us, our affiliates, and all suppliers to your Restaurant must be paid current and all other outstanding obligations to us and our affiliates arising under this Agreement or any other agreement will have been satisfied in a timely manner;
(b) there must not be an outstanding default of any provision of this Agreement or of any other agreement between you or any of your affiliates and us or any of our affiliates, and there must not have been any such defaults during the term of any such agreements;
(c) the transferor and its Owners (if applicable) must execute a general release, in form and substance satisfactory to us, of any and all claims, however arising, against us, our affiliates, and the officers, directors, shareholders, partners, agents, representatives, independent contractors, servants, and employees of each from the beginning of time to the date of transfer;
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to the 2025 Cicis Franchise Disclosure Document, Cicis will not unreasonably withhold consent to a transfer of the franchise. However, Cicis may require satisfaction of certain conditions and reasonably qualify their consent. These conditions include ensuring that all monies owed to Cicis, its affiliates, and all suppliers to the restaurant are current, and all other outstanding obligations to Cicis and its affiliates arising under the Franchise Agreement or any other agreement have been satisfied in a timely manner.
Cicis also requires that there must not be an outstanding default of any provision of the Franchise Agreement or of any other agreement between the franchisee or any of its affiliates and Cicis or any of its affiliates, and there must not have been any such defaults during the term of any such agreements. Additionally, the transferor and its owners (if applicable) must execute a general release, in form and substance satisfactory to Cicis, of any and all claims against Cicis, its affiliates, and their respective officers, directors, shareholders, partners, agents, representatives, independent contractors, servants, and employees from the beginning of time to the date of transfer.
These stipulations are typical in franchising, as franchisors like Cicis need to protect their brand, ensure financial stability within the franchise system, and avoid potential legal issues during ownership transfers. A prospective franchisee should carefully review these conditions to understand their obligations and the circumstances under which a transfer might be delayed or denied.