Can Cinnabon withhold consent for a transfer at its sole and absolute discretion?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, Cinnabon has the right to withhold consent for a transfer of ownership at its sole and absolute discretion, with some exceptions. This means that Cinnabon can deny a franchisee's request to sell or transfer their franchise to another party for almost any reason.
This discretion is significant for prospective franchisees. While franchisees may build equity in their Cinnabon business, they cannot assume they can freely sell it when they choose. Cinnabon's approval is required, and the company has broad authority to deny a transfer. This could impact the franchisee's ability to realize the full value of their investment upon exit.
However, there are some limitations to Cinnabon's discretion. Cinnabon will not consent to a transfer if the franchised business is not open and operating, or if the transfer would cause a transferee or its owners to breach another agreement. Additionally, Minnesota law states that Cinnabon cannot unreasonably withhold consent to the transfer of the franchise for franchises governed by Minnesota law. Prospective franchisees should carefully consider these restrictions and seek legal counsel to fully understand their rights and obligations regarding franchise transfers.
For a proposed Control Transfer, Cinnabon requires written notification at least 90 days prior to any proposed Control Transfer and all requested information at least 60 days prior to any proposed Control Transfer. Also, all sums owed to Cinnabon and its affiliates must be paid.
In general, franchise agreements often grant franchisors approval rights over transfers to protect the brand and ensure qualified new operators. Cinnabon's approach aligns with this industry practice, but franchisees should be aware of the potential limitations on their ability to transfer their business.