What is the definition of 'Transfer' in the context of the Cinnaholic franchise agreement?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
Developer shall not subfranchise, sell, assign, transfer, merge, convey or encumber (each, a "Transfer") this Agreement or any of its rights or obligations hereunder, or suffer or permit any such Transfer of this Agreement or its rights or obligations hereunder to occur by operation of law or otherwise without the prior express written consent of Franchisor.
Source: Item 23 — RECEIPT (FDD pages 62–269)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, a "Transfer" by the Developer (franchisee) encompasses a range of actions related to the franchise agreement. Specifically, it includes subfranchising, selling, assigning, conveying, or encumbering the agreement or any rights or obligations under it. This also extends to any such transfer occurring by operation of law or otherwise.
In practical terms, this means a Cinnaholic franchisee cannot, without Cinnaholic's prior written consent, sell their franchise to someone else, give someone else the right to operate the franchise, or use the franchise agreement as collateral for a loan. The franchisor maintains control over who operates its franchises and under what conditions.
This restriction is typical in franchising, as franchisors want to ensure that new operators meet their standards and are capable of maintaining the brand's reputation. Cinnaholic needs to approve any change in ownership or control of the franchise to protect its brand and the interests of other franchisees. This approval process likely involves assessing the potential transferee's financial stability, business experience, and commitment to the Cinnaholic system. The franchisee must get written consent from Cinnaholic for any of these actions to be valid.