In Virginia, what is the effect if a Cicis Franchise Agreement or Area Development Agreement provision does not constitute 'reasonable cause' for default or termination under the Virginia Retail Franchising Act?

According to the 2025 Cicis Franchise Disclosure Document, a specific provision is added to the "Summary" section of Item 17(h) regarding 'Cause defined non curable defaults' for franchisees in Virginia. This addition clarifies that under Section 13.1-564 of the Virginia Retail Franchising Act, Cicis cannot cancel a franchise without 'reasonable cause'.

This means that if any of the reasons for default or termination listed in the Franchise Agreement or Area Development Agreement do not meet the definition of 'reasonable cause' as defined by the Virginia Retail Franchising Act or other Virginia laws, then that particular reason for termination may not be legally enforceable. In essence, Cicis must have a legally sound and justifiable reason, as defined by Virginia law, to terminate a franchise agreement.

For a prospective Cicis franchisee in Virginia, this provides an added layer of protection. It ensures that Cicis cannot terminate the franchise agreement based on arbitrary or unreasonable grounds that do not align with the state's franchising laws. Franchisees should familiarize themselves with the Virginia Retail Franchising Act to understand what constitutes 'reasonable cause' for termination, and be aware that any clause in their agreement that contradicts this may be unenforceable.