What qualifications must a purchaser have to be approved for a Cinnaholic transfer?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
fers). 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.
- 13.4. Approval of Assignment. Franchisor's approval of any Transfer is, in all cases, contingent upon the following:
- (i) the purchaser and/or the controlling persons of the purchaser having a satisfactory credit rating, being of good moral character, having business qualifications satisfactory to Franchisor, and being willing to enter into an agreement in writing to assume and perform all of Developer's duties and obligations hereunder and/or enter into a new Market Development Agreement for the Area of Responsibility, if so requested by Franchisor, and agreeing to enter into any and all agreements with Franchisor that are being required of all new market developers, including a guaranty agreement and any other agreement which may require payment of different or increased fees from those paid under this Agreement;
- (ii) the terms and conditions of the proposed transfer (including, without limitation, the purchase price) being satisfactory to Franchisor;
- (iii) all monetary obligations (whether hereunder or not) of Developer to Franchisor or Franchisor's affiliates or subsidiaries being paid in full;
- (iv) Developer not being in default hereunder or any other agreement between Developer and Franchisor, including any Franchise Agreement;
- (v) Developer and its owners executing a general release of any and all claims against Franchisor and its affiliates, subsidiaries, members, managers, officers, directo
Source: Item 23 — RECEIPT (FDD pages 62–269)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, a prospective purchaser must meet several qualifications to be approved for a transfer. The purchaser and their controlling individuals must have a satisfactory credit rating, demonstrate good moral character, and possess business qualifications that Cinnaholic finds satisfactory. Additionally, the purchaser must be willing to enter into a written agreement to assume and perform all of the current developer's duties and obligations, or enter into a new Market Development Agreement for the Area of Responsibility if Cinnaholic requests it. The purchaser must also agree to enter into any and all agreements that are required of new market developers, including a guaranty agreement, which may involve different or increased fees compared to the original agreement.
In addition to the purchaser's qualifications, the terms and conditions of the proposed transfer, including the purchase price, must be satisfactory to Cinnaholic. All monetary obligations of the current developer to Cinnaholic, its affiliates, or subsidiaries must be paid in full. The developer must not be in default under any agreement with Cinnaholic, including any Franchise Agreement. Furthermore, the developer and its owners must execute a general release of any and all claims against Cinnaholic and its related parties in a form that Cinnaholic finds satisfactory.
The developer is also required to pay Cinnaholic a transfer fee of $5,000, plus reimbursement for all legal, training, and other expenses incurred by Cinnaholic in connection with the transfer. Before the transfer, the developer must first offer to sell their interest to Cinnaholic, and Cinnaholic must decline the offer. Finally, the trademarks cannot be used in any advertising for any transfer prohibited by the agreement. These conditions ensure that Cinnaholic maintains control over who becomes a franchisee and that the brand's standards and financial interests are protected during a transfer.