If a Cinnaholic developer is a limited liability company, can members transfer their membership interests without the franchisor's consent?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition, if Developer 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, businesstrust, 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 Developer (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.
Notwithstanding anything to the contrary in this Agreement, Franchisor shall have the right to approve or disapprove a Transfer under this Section 13.2 in its sole discretion.
Any Transfer in violation of this Section shall be void and of no force and effect.
Source: Item 23 — RECEIPT (FDD pages 62–269)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, if a Cinnaholic developer is a limited liability company, the members cannot transfer their equity interests without prior written consent from Cinnaholic. This requirement extends not only to the direct members of the developer entity but also to the equity holders of any entity that is itself an equity holder in the Cinnaholic developer.
This provision gives Cinnaholic significant control over who becomes involved in its franchises, even indirectly. Cinnaholic retains the right to approve or disapprove any transfer of equity under Section 13.2 at its sole discretion. Any transfer that violates this section is considered void and without effect.
This policy ensures that all individuals or entities involved in a Cinnaholic franchise meet the franchisor's standards, maintaining brand consistency and operational quality. Prospective franchisees should be aware that any changes in ownership or equity structure, no matter how indirect, require Cinnaholic's approval. This could impact succession planning or investment strategies for the franchise.