What happens to the Cinnaholic agreement upon the Developer's death or Disability?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon Developer's death or Disability (as such term is hereinafter defined), this Agreement or the ownership interest of any deceased or disabled shareholder, partner, member or other equity holder of the Developer or an Equity Holder must be Transferred to a party approved by Franchisor.
Any Transfer, including, without limitation, transfers by devise or inheritance or trust provisions, shall be subject to the same conditions for Transfers set forth in Section 13.4 below.
Franchisor shall not unreasonably withhold its consent to the Transfer of this Agreement or any ownership interest to the deceased or disabled Developer's or Equity Holder's spouse, heirs or members of his or her immediate family, provided all requirements of Section 13.4 have been complied with (except payment of the transfer fee, which shall not apply to such Transfers).
A "Disability" shall have occurred with respect to Developer if Developer, or, if Developer is a corporation, partnership or limited liability company, its controlling shareholder, partner, member or other equity holder, is unable to actively participate in its activities as Developer hereunder for any reason for a continuous period of six months.
As used in this Section 13.3, "Developer" may include a disabled or deceased controlling shareholder, partner or member where the context so requires.
Source: Item 23 — RECEIPT (FDD pages 62–269)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, in the event of the Developer's death or disability, the agreement or ownership interest must be transferred to a party approved by Cinnaholic. This condition also applies to the death or disability of a shareholder, partner, member, or other equity holder of the Developer. The term 'Developer' can also refer to a disabled or deceased controlling shareholder, partner, or member, depending on the context.
Any transfer, including those by devise, inheritance, or trust provisions, is subject to the same conditions as other transfers, as detailed in Section 13.4 of the agreement. However, Cinnaholic will not unreasonably withhold consent to transfer the agreement or ownership interest to the deceased or disabled party's spouse, heirs, or immediate family members, provided all the requirements of Section 13.4 are met, except for the transfer fee, which is waived in such cases.
A 'Disability' is defined as the inability of the Developer, or the controlling shareholder, partner, member, or other equity holder of the Developer (if the Developer is a corporation, partnership, or limited liability company), to actively participate in the activities as Developer for a continuous period of six months. This provision ensures that Cinnaholic can maintain consistent management and operation of its franchises even in unforeseen circumstances.
This clause is fairly standard in franchising, as franchisors need to ensure business continuity and protect their brand. Prospective Cinnaholic franchisees should carefully review Section 13.4 to understand the specific conditions for transfer and discuss any concerns with Cinnaholic during their due diligence.