Is a Cinnaholic franchisee allowed to subfranchise without the Franchisor's consent?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
Assignment by Franchisee.
Franchisee shall not subfranchise, sell, assign, transfer, merge, convey or encumber (each, a "Transfer"), the Bakery, the Franchised Site, this Agreement or any of its rights or obligations hereunder, or suffer or permit any such Transfer of the Bakery, the Franchised Site, this Agreement or its rights or obligations hereunder to occur by operation of law or otherwise without the prior express written consent of Franchisor.
In addition, if Franchisee is a corporation, limited liability company, partnership, business trust, or similar association or entity, the shareholders, members, partners, beneficiaries, investors or other equity holders, as the case may be, may not Transfer their equity interests in such corporation, limited liability company, partnership, business trust, or similar association or entity, without the prior written consent of Franchisor.
Furthermore, in the event that any shareholder, member, partner, investor or other equity holder of Franchisee (the "Equity Holder") is a corporation, limited liability company, partnership, business trust, or similar association or entity, the interests of the shareholders, members, partners, beneficiaries, investors or other equity holders, as the case may be, in such Equity Holder, may not be Transferred, without the prior written consent of Franchisor.
Franchisor will not unreasonably withhold consent to a Transfer provided the requirements of Section 19.4 have been satisfied.
Any Transfer in violation of this Section shall be void and of no force and effect.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, franchisees are not allowed to subfranchise without prior written consent from the franchisor. This restriction is explicitly stated in Item 22, which covers contract terms and franchisee obligations regarding transfers of the franchise.
The FDD specifies that a franchisee cannot subfranchise, sell, assign, transfer, merge, convey, or encumber the bakery, the franchised site, or the franchise agreement itself without Cinnaholic's express written consent. This requirement extends not only to the franchisee but also to any equity holders, such as shareholders or members, within the franchisee's business entity. These equity holders also cannot transfer their interests without the franchisor's approval.
This provision ensures that Cinnaholic maintains control over who operates its franchises and protects the brand's integrity. While Cinnaholic will not unreasonably withhold consent to a transfer if certain requirements are met, any transfer done without this consent is considered void and without effect. This stringent control over subfranchising and transfers is common in franchising to maintain brand standards and protect the franchise system.