For Cinnaholic, what is the continuous period of time that defines a 'Disability'?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon Developer's death or Disability (as such term is hereinafter defined), this Agreement or the ownership interest of any deceased or disabled shareholder, partner, member or other equity holder of the Developer or an Equity Holder must be Transferred to a party approved by Franchisor.
Any Transfer, including, without limitation, transfers by devise or inheritance or trust provisions, shall be subject to the same conditions for Transfers set forth in Section 13.4 below.
Franchisor shall not unreasonably withhold its consent to the Transfer of this Agreement or any ownership interest to the deceased or disabled Developer's or Equity Holder's spouse, heirs or members of his or her immediate family, provided all requirements of Section 13.4 have been complied with (except payment of the transfer fee, which shall not apply to such Transfers).
A "Disability" shall have occurred with respect to Developer if Developer, or, if Developer is a corporation, partnership or limited liability company, its controlling shareholder, partner, member or other equity holder, is unable to actively participate in its activities as Developer hereunder for any reason for a continuous period of six months.
Source: Item 23 — RECEIPT (FDD pages 62–269)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, a 'Disability' concerning the developer is defined by a continuous period of six months. Specifically, if the developer, or the controlling shareholder, partner, member, or other equity holder of the developer (if the developer is a corporation, partnership, or limited liability company), is unable to actively participate in the activities as a Cinnaholic developer, it is considered a disability.
This definition has implications for the transfer of the Cinnaholic agreement or ownership interest. Upon the death or disability of the developer, the agreement or ownership interest must be transferred to a party approved by Cinnaholic. This transfer is subject to certain conditions, and Cinnaholic agrees to not unreasonably withhold consent to the transfer of the agreement or any ownership interest to the deceased or disabled developer's spouse, heirs, or members of their immediate family, provided all requirements are met.
This clause protects Cinnaholic by ensuring that the franchise continues to be actively managed and operated, even in the event of unforeseen circumstances affecting the developer's ability to participate. For a prospective franchisee, this means having a succession plan in place or ensuring adequate insurance coverage to address potential disability scenarios. It is important to understand the conditions and requirements for transferring the agreement to ensure a smooth transition and avoid any disruptions to the operation of the Cinnaholic bakery.