What constitutes a 'Disability' that would trigger transfer requirements for a Cinnaholic franchise?

According to Cinnaholic's 2025 Franchise Disclosure Document, a 'Disability' that would trigger transfer requirements occurs if the franchisee, or the controlling shareholder, partner, member, or other equity holder of the franchisee (if the franchisee is a corporation, partnership, or limited liability company), is unable to actively participate in the Cinnaholic franchise's activities for a continuous period of six months for any reason.

This definition has significant implications for prospective Cinnaholic franchisees. If the franchisee or the controlling person becomes disabled and cannot actively participate in the business for six continuous months, the franchise agreement or ownership interest must be transferred to a party approved by Cinnaholic. This transfer is subject to Cinnaholic's standard transfer conditions, as outlined in Section 19.4 of the franchise agreement.

Cinnaholic will not unreasonably withhold consent to the transfer of the agreement or ownership interest to the deceased or disabled franchisee's spouse, heirs, or immediate family members, provided all the requirements of Section 19.4 are met, except for the payment of a transfer fee. This exception provides some reassurance for franchisees who may face unforeseen circumstances. However, it's important to note that the new transferee must still meet Cinnaholic's criteria for approval.

It is important for potential franchisees to understand these conditions and consider how they might be affected by a disability. Franchisees should discuss with Cinnaholic what documentation or proof of disability may be required to initiate the transfer process and what specific criteria the potential transferee will need to meet to gain approval.