Can Cinnaholic reject a proposed franchisee transfer if the franchisee or proposed transferee has not cured any default in the Cinnaholic Franchise Agreement?

According to the 2025 Cinnaholic Franchise Disclosure Document, Cinnaholic can refuse a franchisee transfer if the franchisee or the proposed transferee has not addressed any existing defaults in the Franchise Agreement at the time of the proposed transfer.

This stipulation means that if a Cinnaholic franchisee wishes to transfer their franchise to another party, both the franchisee and the potential new owner must be in good standing with Cinnaholic. Any outstanding financial obligations, breaches of contract, or other failures to comply with the Franchise Agreement must be resolved before the transfer can proceed. This protects Cinnaholic by ensuring that new franchisees meet their standards and obligations.

For a prospective Cinnaholic franchisee, this highlights the importance of maintaining compliance with the Franchise Agreement. Failure to do so can not only jeopardize the current operation of the franchise but also complicate or prevent any future sale or transfer of the business. It also emphasizes the need for potential transferees to conduct thorough due diligence to ensure that the franchise they are looking to acquire is free from any existing defaults that could hinder the transfer process.