Can a Cinnaholic franchisee transfer their rights or obligations under the Franchise Agreement without written consent?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
In the event Franchisee or an Equity Holder is a corporation, limited liability company, partnership, business trust, or similar association or entity with certificated equity interests, all stock or equity certificates of Franchisee or Equity Holder, as the case may be, shall have conspicuously endorsed upon them a legend in substantially the following form:
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, a franchisee is restricted from transferring any aspect of their franchise without prior written consent from Cinnaholic. This includes subfranchising, selling, assigning, or otherwise transferring the bakery, the franchised site, the Franchise Agreement itself, or any associated rights or obligations. This restriction extends to transfers occurring by operation of law.
Furthermore, if the franchisee is a business entity such as a corporation or LLC, any transfer of equity interests by shareholders, members, partners, or other equity holders also requires Cinnaholic's prior written consent. This requirement extends even further to transfers of equity interests in any entity that is an equity holder of the franchisee.
Cinnaholic states that it will not unreasonably withhold consent to a transfer, provided that certain requirements are met. Any transfer that violates these conditions will be considered void and without effect. To ensure compliance, Cinnaholic requires that all stock or equity certificates of the franchisee or any equity holder be endorsed with a legend indicating the transfer restrictions.