To what extent can transfer fees reflect the franchisor's costs when transferring a Cinnaholic franchise?

According to the 2025 Cinnaholic Franchise Disclosure Document, transfer fees are limited to the franchisor's reasonable estimated or actual costs when effecting a transfer. This means Cinnaholic can only charge a fee that covers the expenses they incur during the transfer process.

This provision protects prospective Cinnaholic franchisees by preventing the franchisor from imposing excessive or arbitrary transfer fees. Instead, the fees must be directly tied to the actual costs Cinnaholic incurs, such as administrative, legal, or training expenses associated with the transfer. This ensures that the transfer fee is fair and justifiable.

This type of regulation is designed to prevent franchisors from profiting unduly from franchise transfers. Franchisees should request a detailed breakdown of the costs included in the transfer fee to ensure they align with this standard. If a franchisee believes the transfer fee is unreasonable or exceeds Cinnaholic's actual costs, they may have grounds to challenge the fee.