Does Cicis waive the franchisee's obligation to satisfy post-term obligations after the expiration of the original franchise agreement if the franchisee continues operating the Restaurant?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
- Acknowledgment of Expiration of Original Franchise Agreement. The parties acknowledge and agree that, as of the Effective Date, the Original Franchise Agreement has expired and that the ownership and operation of the Restaurant will hereafter be governed by and subject to the New Franchise Agreement. Notwithstanding the foregoing, you acknowledge and agree that nothing contained in this Addendum will release you and your owners from any obligations under the Original Franchise Agreement that by their nature survive termination (such as, [Section 15 (Indemnification)]); provided, however, that because you will continue operating the Restaurant after the expiration of the Original Franchise Agreement, we waive your obligation to satisfy the post-term obligations set forth in [Section 18 (Post-Termination)] of the Original Franchise Agreement.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 58–64)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, if a franchisee continues to operate the Restaurant after the expiration of the original franchise agreement, Cicis waives the franchisee's obligation to satisfy the post-term obligations outlined in Section 18 of the original franchise agreement. This waiver is contingent upon the franchisee entering into a New Franchise Agreement with Cicis. The New Franchise Agreement governs the ownership and operation of the Restaurant from the effective date forward.
This waiver is part of an addendum to the New Franchise Agreement, acknowledging that the original agreement has expired and the new one now controls the franchise's operation. However, the franchisee remains responsible for any obligations under the original agreement that naturally survive termination, such as indemnification as described in Section 15.
In practical terms, this means that if a Cicis franchisee renews their agreement, they won't be subject to the usual requirements that apply when a franchise agreement ends, such as ceasing to use Cicis's trademarks or trade secrets, provided they continue operating under the new agreement. This can simplify the renewal process for existing franchisees, as it removes the burden of complying with post-termination obligations that would otherwise apply.