What is the deadline for closing the sale of Assets after Cinnaholic exercises its option to purchase?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
- (iii) Any sale of the Assets hereunder shall close no later than 60 days after delivery of written notice of Franchisor's exercise of its option is given to Franchisee. Franchisor has the right to assign its option hereunder and Franchisee must sign all documents of transfer reasonably necessary for the purchase of the Assets. All Assets transferred shall be free and clear of all liens and encumbrances, with all sales and transfer taxes paid by the Franchisee. At the closing, Franchisee and its owners shall execute general releases, in a form satisfactory to Franchisor, of any and all claims against Franchisor and its owner, officers, employees, directors, agents, successors, and assigns.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, if Cinnaholic exercises its option to purchase the assets of a franchise, the sale must close within 60 days. This 60-day period starts from the date Cinnaholic provides written notice to the franchisee of its decision to exercise the purchase option.
This means that a Cinnaholic franchisee needs to be prepared to finalize the sale and transfer of assets relatively quickly once they receive notice from Cinnaholic. This includes ensuring that all assets are free of any liens or encumbrances, and that all sales and transfer taxes are paid. The franchisee is responsible for these costs.
Furthermore, at the closing of the sale, the franchisee and their owners must sign general releases, in a form satisfactory to Cinnaholic, releasing any and all claims against Cinnaholic and its related parties. This is a standard practice in franchise agreements to ensure a clean break and prevent future legal issues. Franchisees should carefully review these releases with legal counsel to understand the full scope of what they are agreeing to.
Cinnaholic also retains the right to assign its option to purchase the assets to another party, and the franchisee is obligated to sign all necessary transfer documents to facilitate the purchase. This clause provides Cinnaholic with flexibility in how it handles the purchase of a franchise's assets upon termination or expiration of the franchise agreement.