Under what circumstances is a transfer of a Cinnaholic franchise required due to death or disability?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
| ock | is | subject | to | the | terms | and | conditions | of | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CINNAHOLIC | FRANCHISING, | LLC | FRANCHISE | AGREEMENT | |||||||||
| dated the day of, 20" |
- 19.3. Death or Disability of Franchisee. Upon Franchisee'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 Franchisee 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 19.4. Franchisor shall not unreasonably withhold its consent to the Transfer of this Agreement or any ownership interest to the deceased or disabled Franchisee's or Equity Holder's spouse, heirs or members of his or her immediate family, provided all requirements of Section 19.4 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 Franchisee if Franchisee, or, if Franchisee 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 Franchisee hereunder for any reason for a continuous period of six months. As used in this Section 19.3, "Franchisee" may include a disabled or deceased controlling shareholder, partner or member where the context so requires.
- 19.4. Approval of Assignment.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, if a franchisee dies or becomes disabled, the franchise agreement or the ownership interest must be transferred to a party approved by Cinnaholic. This applies not only to the franchisee but also to any deceased or disabled shareholder, partner, member, or other equity holder of the franchisee.
A "Disability" is defined as the inability of the franchisee, or the controlling shareholder, partner, member, or equity holder, to actively participate in the Cinnaholic franchise activities for a continuous period of six months. In such cases, the transfer is required to ensure the continued operation of the Cinnaholic franchise under capable management.
Cinnaholic will not unreasonably withhold consent to the transfer of the agreement or ownership interest to the deceased or disabled franchisee's spouse, heirs, or immediate family members, provided all other requirements for transfers are met. However, the standard transfer fee is waived in these specific cases. All transfers are subject to Cinnaholic's approval, which is contingent upon the purchaser's satisfactory credit rating, good moral character, business qualifications, willingness to comply with training requirements, and agreement to assume all obligations under the franchise agreement or enter into a new agreement if requested by Cinnaholic.