What financial obligations must be met before a Cinnabon franchisee can proceed with a Control Transfer?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
- B.
All sums you owe us and our affiliates are paid.
- K.
You pay us a transfer fee equal to 50% of the amount of the then-current initial franchise fee.
- L.
You and your Owners must agree to remain liable for all of the obligations to us in connection with the Franchised Business arising before the effective date of the Transfer and execute any and all instruments that we reasonably request to evidence such liability.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, a franchisee must meet specific financial obligations before a Control Transfer can proceed. Specifically, all sums owed to Cinnabon and its affiliates must be paid in full. Additionally, the franchisee must pay a transfer fee equal to 50% of the then-current initial franchise fee.
These financial obligations ensure that Cinnabon receives all outstanding payments and is compensated for the transfer of the franchise to a new owner. This is a standard practice in franchising, as franchisors want to ensure they are not left with unpaid debts and that they receive a fee for facilitating the transfer.
It is important for prospective Cinnabon franchisees to understand these financial obligations, as they can significantly impact the cost of transferring the franchise. Franchisees should factor these costs into their financial planning and be prepared to meet these obligations before proceeding with a Control Transfer. Furthermore, the franchisee and owners must agree to remain liable for all obligations to Cinnabon in connection with the franchised business arising before the effective date of the transfer and execute any instruments to evidence such liability.