Under what conditions can Cinnabon transfer its rights and obligations under the Franchise Agreement?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
- 16.10 Our Right to Transfer.
We may Transfer all of our rights and obligations under this Agreement, provided that: (i) we, in our sole discretion, determine that the transferee under the Transfer is able to perform our obligations under this Agreement; and (ii) the transferee agrees, in writing, to perform our obligations under this Agreement.
We are not required to obtain your
consent for our Transfer. Following the effective date of the Transfer, you will look solely to the transferee, and not to us, for the performance of all obligations in this Agreement.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to the 2025 Cinnabon Franchise Disclosure Document, Cinnabon may transfer all of its rights and obligations under the Franchise Agreement if two conditions are met. First, Cinnabon must determine, in its sole discretion, that the transferee is able to perform Cinnabon's obligations under the agreement. Second, the transferee must agree, in writing, to perform Cinnabon's obligations.
Notably, Cinnabon is not required to obtain the franchisee's consent for this transfer. Following the transfer, the franchisee must look solely to the new transferee for the performance of all obligations outlined in the Franchise Agreement. This means that the franchisee's contractual relationship shifts entirely to the new entity, and Cinnabon is no longer responsible for fulfilling its obligations.
This clause is fairly standard in franchise agreements, allowing the franchisor flexibility in its business operations. However, it places the onus on Cinnabon to ensure the transferee is capable and willing to uphold the agreement, as the franchisee's business relies on the franchisor's support and adherence to the franchise terms. For a prospective franchisee, this highlights the importance of due diligence into Cinnabon's long-term stability and potential transfer scenarios.