Does the Cinnaholic franchise agreement allow the franchisor to sell the Cinnaholic system to a third party?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee agrees and affirms that Franchisor may sell itself, its assets, the Marks and/or the CINNAHOLIC® System to a third-party; may go public, may engage in private placement of some or all of its securities; may merge, acquire other corporations, or be acquired by another corporation; and/or may undertake a refinancing, recapitalization, leveraged buyout or other economic or financial restructuring.
Franchisee further agrees and affirms that Franchisor has the right, now or in the future, to purchase, merge, acquire or affiliate with an existing competitive or noncompetitive franchise network, chain or any other business regardless of the location of that chain's or business' facilities, and to operate, franchise or license those businesses and/or facilities as CINNAHOLIC® Bakeries operating under the Marks or any other marks following Franchisor's purchase, merger, acquisition or affiliation, regardless of the location of these facilities, which Franchisee acknowledges may be proximate to any of its Bakeries.
With regard to any of the above sales, assignments and dispositions, Franchisee expressly and specifically waives any claims, demands or damages arising from or related to the loss of Franchisor's name, the Marks (or any variation thereof) and the CINNAHOLIC® System and/or the loss of association with or identification of CINNAHOLIC FRANCHISING, LLC, under this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the franchise agreement allows Cinnaholic to sell the Cinnaholic system to a third party. The agreement states that Cinnaholic may sell itself, its assets, the Marks, and/or the Cinnaholic system to a third party. They may also go public, engage in private placement of securities, merge with or acquire other corporations, or be acquired by another corporation, and/or undertake a refinancing, recapitalization, leveraged buyout, or other economic or financial restructuring.
This means that a prospective Cinnaholic franchisee should be aware that the brand could be sold or change hands during the term of their franchise agreement. This is a fairly standard clause in franchise agreements, as it allows the franchisor flexibility in managing and growing the brand.
The franchisee also waives any claims, demands, or damages related to the loss of Cinnaholic's name, the Marks, the Cinnaholic system, and/or the loss of association with Cinnaholic Franchising, LLC, resulting from these sales, assignments, and dispositions. This means that if Cinnaholic is sold, franchisees cannot sue for damages related to the change in ownership or brand identity. However, in the state of New York, the franchisor will not make any assignment of the agreement except to an assignee who, in the franchisor's good faith judgment, is willing and able to assume the franchisor's obligations under the agreement.