According to the agreement, what is Cinnaholic's expenditure related to establishing the Cinnaholic system?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
WHEREAS, Franchisor at a substantial expenditure of time, effort and money has established a system of developing, opening, operating and promoting casual bakeries specializing in offering custom gourmet cinnamon rolls and other food products and related bakery services under the name "CINNAHOLIC®" ("CINNAHOLIC® Bakeries" or "Bakeries") (the "CINNAHOLIC® System"); and
WHEREAS, the distinguishing features of the CINNAHOLIC® System, include, but are not limited to, the name "CINNAHOLIC®" and all such other trade names, trademarks, service marks, logos, emblems, insignia and signs developed for use with the CINNAHOLIC® System from time to time (collectively, the "Marks"); specially designed fixtures, equipment, facilities, containers, and other items used in serving and dispensing food products; products, methods, procedures, recipes, distinctive food products and the formula and quality standards therefor; and instructional materials and training courses; all of which may be changed, improved and further developed by Franchisor from time to time; and
WHEREAS, Franchisor has acquired knowledge and experience in the composition, distribution, advertising and sale of food products by Bakeries using the CINNAHOLIC® System and with respect to the style of the facilities and signs used by said Bakeries and has successfully established a reputation, demand and goodwill for the products sold by such Bakeries; and
WHEREAS, CINNAHOLIC® Bakeries and the products sold therein have a reputation for quality that has been acquired and is being maintained by requiring all franchisees of the CINNAHOLIC® System to maintain high standards of quality and service;
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the franchise agreement states that the franchisor, Cinnaholic Franchising, LLC, has invested significant time, effort, and money in establishing the Cinnaholic system. This system encompasses the development, opening, operation, and promotion of casual bakeries specializing in custom gourmet cinnamon rolls and other food products. The agreement highlights that Cinnaholic has developed distinguishing features for the system. These features include the brand name and associated trademarks, specialized fixtures and equipment, unique food products, recipes, and quality standards, as well as instructional materials and training courses.
The franchise agreement emphasizes that Cinnaholic has gained considerable knowledge and experience in the composition, distribution, advertising, and sale of food products through its bakeries. This expertise extends to the style of facilities and signage used, which has allowed Cinnaholic to establish a strong reputation, demand, and goodwill for its products. The agreement also notes that Cinnaholic bakeries and their products have a reputation for quality, which is maintained by requiring all franchisees to adhere to high standards of quality and service.
For a prospective franchisee, this signifies that Cinnaholic has made a substantial investment in creating a comprehensive and well-defined business system. This investment covers various aspects, from branding and operational procedures to product development and quality control. By franchising with Cinnaholic, a franchisee benefits from the franchisor's prior investment and established system, which can reduce the risks and challenges associated with starting a new business from scratch. However, the specific monetary value of Cinnaholic's investment is not disclosed in this excerpt.