Will Cicis unreasonably withhold consent to a transfer of a Cicis franchise?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
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 will cause to occur, at your cost):
(i) at the transferee's expense, the transferee and all Persons required under the applicable franchise agreement to have completed our training programs must complete any such training programs upon such terms and conditions as we may reasonably require;
(j) you will pay us a transfer fee of $7,500, plus such amount as is necessary to reimburse us for our reasonable out of pocket costs and expenses associated with the Transfer;
(k) you have provided us executed versions of any relevant documents to effect the Transfer, and all other information we request about the proposed Transfer, transferee, and its owners, and such Transfer meets all of our requirements.
If the transferor offers the transferee financing for any part of the purchase price, you and your Owners hereby agree that all of the transferee's obligations under promissory notes, agreements, or security interests reserved in your Restaurant are subordinate to the transferee's obligation to pay fees and other amounts due to us, our affiliates, and third party vendors and otherwise to comply with this Agreement (or any applicable franchise agreement replacing this Agreement);
- (l) the transferor agrees to comply with the provisions of this Agreement related to Competing Businesses and all such other obligations that survive expiration or termination of this Agreement; and
Our consent to a Transfer will not constitute a waiver of any claims which we may have against the transferring party, nor will it be deemed a waiver of our right to demand exact compliance with any of the terms of this Agreement by the transferee.
Ownership interests in you may not be offered to the public under the Securities Act of 1933, as amended, nor may they be registered under the Securities Exchange Act of 1934, as amended, or any comparable federal, state, or foreign law, rule, or regulation and may be offered by private offering or otherwise only with our prior written consent, which we may withhold or qualify in our sole discretion.
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, Cicis will not unreasonably withhold consent to a transfer of a franchise. However, Cicis may require satisfaction of certain conditions and reasonably qualify their consent. These conditions include ensuring the transferee and all persons required to complete Cicis's training programs do so at the transferee's expense, under terms and conditions Cicis reasonably requires.
Additionally, the franchisee must pay Cicis a transfer fee of $7,500, along with an amount necessary to reimburse Cicis for reasonable out-of-pocket costs and expenses associated with the transfer. The franchisee must also provide executed versions of relevant documents to effect the transfer, along with all other information Cicis requests about the proposed transfer, transferee, and its owners, ensuring the transfer meets all of Cicis's requirements. If the transferor offers financing to the transferee, the transferor agrees that the transferee's obligations are subordinate to the transferee's obligation to pay fees and other amounts due to Cicis.
The transferor must also agree to comply with the provisions of the Franchise Agreement related to Competing Businesses and all other obligations that survive the expiration or termination of the agreement. Cicis's consent to a transfer will not waive any claims Cicis may have against the transferring party, nor will it waive Cicis's right to demand exact compliance with any terms of the agreement by the transferee. Ownership interests in the franchise may not be offered to the public without Cicis's prior written consent, which Cicis may withhold or qualify at its sole discretion.
These stipulations are fairly typical in franchising. Franchisors want to maintain control over who enters their system to protect the brand and ensure consistent quality and operational standards. The transfer fee helps to cover the costs Cicis incurs in reviewing and approving the transfer, while the training requirements ensure that the new franchisee is properly equipped to operate the Cicis restaurant according to Cicis's standards. The restrictions on offering ownership interests to the public without consent are in place to comply with securities laws and to maintain control over the ownership structure of the franchise system.