What constitutes a default that would prevent a Cinnabon franchisee from transferring their franchise?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
Accordingly, neither you nor any of the Owners or any successors to any part of your interest in this Agreement or the license may make any Transfer or permit any Transfer to occur without obtaining our prior written consent.
Any purported Transfer, without our prior written consent, will be null and void and will constitute a default under this Agreement, for which we may terminate this Agreement without opportunity to cure.
- A.
Requesting Consent.
If you or any of your Owners desire to make a Transfer, you must promptly provide us with written notice.
You agree to provide any information and documentation relating to the proposed Transfer that we reasonably require.
We have the right to communicate with both you, your counsel, and the proposed transferee on any aspect of a proposed Transfer.
No Control Transfer may be completed until at least 60 days after we receive all requested information to evaluate the proposed Control Transfer.
No other Transfer may be completed until at least 30 days after we receive all requested information to evaluate such proposed Transfer.
- B.
Granting Consent.
We have sole and absolute discretion to withhold our consent, except as otherwise provided in Sections 16.4 through 16.7.
Without limiting the foregoing, we will not consent to a Transfer, and we are under no obligation to do so, if (i) your Franchised Business is not open and operating; or (ii) the Transfer would cause a transferee or its owners to breach another agreement (whether or not with us).
Our consent to a Transfer does not constitute a waiver of any claims that we have against the transferor, nor is it a waiver of our right to demand exact compliance with the terms of this Agreement.
- 16.3 Control Transfer.
For a proposed Control Transfer, in addition to any other conditions that we may specify and without limiting in any way our sole and absolute discretion to grant or withhold consent for a proposed Control Transfer, at a minimum, the following conditions must be satisfied (unless waived by us):
- A.
You notify us in writing at least 90 days prior to any proposed Control Transfer and provide all requested information at least 60 days prior to any proposed Control Transfer.
- B.
All sums you owe us and our affiliates are paid.
- C.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, transferring ownership without prior written consent constitutes a default, potentially leading to termination of the franchise agreement without an opportunity to cure the default. Specifically, neither the franchisee, their owners, nor any successors can transfer any interest in the agreement or license without Cinnabon's approval.
For a standard transfer, Cinnabon requires written notice before any transfer. The franchisee must supply all reasonably required information and documentation pertaining to the proposed transfer. Cinnabon retains the right to communicate with the franchisee, their counsel, and the prospective transferee regarding any aspect of the proposed transfer. No transfer can be completed until at least 30 days after Cinnabon receives all requested information.
For a control transfer, the franchisee must notify Cinnabon in writing at least 90 days prior to the proposed transfer and provide all requested information at least 60 days prior. All sums owed to Cinnabon and its affiliates must be paid. Cinnabon has sole and absolute discretion to withhold consent to a transfer, unless otherwise provided in specific sections of the franchise agreement. Cinnabon will not consent if the franchised business is not open and operating or if the transfer would cause a breach of another agreement. Consent to a transfer does not waive any claims Cinnabon has against the transferor or its right to demand compliance with the agreement terms.
If the Cinnabon franchise is an Express Bakery located in a Host Facility, the franchisee cannot transfer rights or obligations unless they also transfer the Host Facility in compliance with its franchise agreement. In Maryland, no release language required on renewal, transfer, or signing the Franchise Agreement will relieve Cinnabon from liability imposed by the Maryland Franchise Registration and Disclosure Law.