Is a transfer fee due when transferring my Cinnabon franchise due to death or permanent incapacity?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provisions | Section in Franchise Agreement | Summary |
|---|---|---|
| o. You must comply with our right of first refusal. p. If you operate a Co-Branded Bakery, the Co-Branded Agreement or Co-Branded Franchise are transferred at the same time. | ||
| FA: 16.4 (non-control transfers) | a. You give us prior written notice of the transfer. b. You pay all sums owed. c. You are not in default d. Transferee meets qualifications e. Transferee signs assignment and guaranty f. You and your guarantors and owners sign a general release. g. You remain liable for pre-Transfer obligations. h.You pay us a Transfer Fee. | |
| FA: 16.5 (related party transfers) | a. You give us prior written notice of the transfer. b. You are not in default c. Transferee meets qualifications d. Transferee assumes in writing the Franchise Agreement and the guaranty. e. You may not be in default under the Franchise Agreement. f. You pay us a Transfer Fee. g. You and your guarantors and owners must sign a general release and remain liable for pre-Transfer obligations | |
| n. Our right of first refusal to acquire your business | FA: 16.8 | We can match any offer for your Bakery or substantially all interest in your entity. |
| ES: 20.Q. | Above not applicable for an Express Bakery. | |
| o. Our option to | FA: 18.4 | We may purchase your Goods related to the Bakery at the fair |
| purchase your | market value (exclusive of good will) and may purchase your | |
| business | Accepted Location if you own it or your interest in any lease. | |
| ES: 20.U. | Above not applicable for an Express Bakery. | |
| p. Your death or disability | FA: 16.6 | Upon 180 days from your death or permanent incapacity you must transfer all rights and interests to buyer that complies with Transfer provisions, except no Transfer Fee will be due. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 93–100)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, specifically Item 17, if a franchisee needs to transfer their franchise due to death or permanent incapacity, the standard transfer fee is waived. However, this exception is conditional. The transfer must occur within 180 days of the death or permanent incapacity, and the buyer must still meet all other transfer requirements stipulated in the Franchise Agreement.
This provision offers a significant benefit to the franchisee's estate or the franchisee themselves in the event of permanent incapacity. By waiving the transfer fee, Cinnabon reduces the financial burden associated with transitioning the franchise to a new owner during a difficult time. This can be particularly helpful in ensuring a smoother and more efficient transfer process, allowing the estate or the incapacitated franchisee to focus on other critical matters.
It is important to note that while the transfer fee is waived, all other transfer provisions remain in effect. This means that the proposed buyer must still meet Cinnabon's qualifications, agree to the terms of the Franchise Agreement, and comply with all other requirements outlined in Item 17. The 180-day timeframe is also a critical factor, as failure to complete the transfer within this period could result in the standard transfer fee being applied. Therefore, prospective franchisees should be aware of these conditions and plan accordingly to ensure a seamless transfer in the event of death or permanent incapacity.