If Cinnaholic declines a franchisee's offer to sell, how long does the franchisee have to complete the transfer to the prospective purchaser?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
If during the term of this Agreement, Franchisee shall receive a bona fide offer from a prospective purchaser for any interest in Franchisee or the Bakery (whether by sale of assets, sale of equity interest, merger, consolidation or otherwise), it shall offer the same to Franchisor in writing at the same price and on the same terms or the monetary equivalent; which offer Franchisor may accept at any time within 30 days after receipt thereof. If the parties cannot agree on a reasonable monetary equivalent, an independent appraiser designated by Franchisor shall determine the monetary equivalent and the appraiser's determination will be final. If Franchisor declines, or does not within such 30 day period accept, such offer, then Franchisee may make such Transfer to such purchaser (provided Franchisor approves of such purchaser in accordance with Section 19.2 and subject to compliance with Section 19.4), but not at a lower price nor on more favorable terms than have been offered to Franchisor. If Franchisee fails to complete such Transfer within 90 days following the refusal or failure to act by Franchisor, then Franchisee may not complete such Transfer without first offering the same to Franchisor again as provided above. The parties recognize that the terms of this Section 23 do not apply to a sale and subsequent leaseback of the Franchised Site or any furnishings or equipment used thereon, or any other Transfer of the Franchised Site or the furnishings or equipment thereon in connection with any bona fide financing plan. In no event shall Franchisee offer any interest in this Agreement, or such premises or any interest therein, or any interest in the business conducted thereon, or in the equipment or furnishings located thereon, or in any interest of Franchisee or an Equity Holder for Transfer at public auction, nor at any time shall an offer be made to the public to Transfer the same, through the medium of advertisement, either in the newspapers or otherwise, without having first obtained the written consent of Franchisor to such advertisement or publication.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, if a franchisee receives a legitimate offer to purchase their interest in the Cinnaholic bakery and offers it to Cinnaholic, Cinnaholic has 30 days to accept or decline the offer. Should Cinnaholic decline or fail to act within that 30-day period, the franchisee is then permitted to proceed with the transfer to the original prospective purchaser.
However, the franchisee must still gain Cinnaholic's approval of the purchaser and comply with specific requirements. The sale to the purchaser must not be at a lower price or on more favorable terms than those initially offered to Cinnaholic.
Most importantly, the franchisee has a limited time frame to finalize the transfer. The Cinnaholic franchisee must complete the transfer within 90 days following Cinnaholic's refusal or failure to act. If the transfer is not completed within this 90-day window, the franchisee is obligated to re-offer the sale to Cinnaholic under the same terms as before. This process ensures Cinnaholic retains the first option to purchase the franchise and maintains control over who joins their franchise system.