Does the Cinnaholic Franchise Agreement inure to the benefit of the Franchisor's successors and assigns?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
This Agreement may be unilaterally assigned by the Franchisor and shall inure to the benefit of its successors and assigns.
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 the 2025 Cinnaholic Franchise Disclosure Document, the Franchise Agreement can be unilaterally assigned by Cinnaholic and will benefit its successors and assigns. This means that if Cinnaholic is sold or merges with another company, the new owner or entity will inherit the rights and obligations of the Franchise Agreement. The franchisee must continue to abide by the agreement's terms with the new franchisor.
Cinnaholic retains the right to sell its assets, trademarks, or the entire Cinnaholic system to a third party. They can also go public, engage in private placements, merge with or acquire other corporations, or undergo financial restructuring. The franchisee specifically waives any claims or damages related to the loss of Cinnaholic's name, trademarks, or association with Cinnaholic Franchising, LLC, resulting from these changes.
This clause ensures Cinnaholic has flexibility in its business operations and potential exit strategies. However, it also means that a franchisee could find themselves working with a completely different company or management team during the term of their agreement. While the core terms of the agreement should remain in place, the new franchisor's approach to support, marketing, and brand development could differ significantly. Franchisees in New York have some protection, as Cinnaholic will not make any assignment of the Agreement except to an assignee who, in Cinnaholic's good faith judgment, is willing and able to assume Cinnaholic's obligations under the Agreement.
Furthermore, the agreement and its restrictions benefit Cinnaholic and its successors, and they bind the franchisee and their permitted heirs, successors, and assigns. This ensures the agreement remains enforceable even if ownership of either the franchise or the franchisor changes. However, unless explicitly stated in Section 18.1, the agreement does not grant rights or remedies to anyone not directly involved in the agreement, except for the bound parties.