What action must a Cinnaholic franchisee take before terminating the Development Agreement due to Cinnaholic's default?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary | |
|---|---|---|---|
| a. | Length of the franchise term | Section 2.1 | 10 years |
| b. | Renewal or extension of the term | Section 2.2 | If you meet the requirements, you can renew for one additional consecutive 10 year term; after that you will have no right to renew the Franchise Agreement. |
| c. | Requirements for franchisee to renew or extend | Section 2.2 | You must: provide written notice of election to renew; not be in default of the Franchise Agreement or any other agreement relating to the Bakery; sign the then-current form of Franchise Agreement; pay a renewal fee; refurbish the Bakery, if required; complete any required retraining program; sign the current form of general release in Exhibit J to this Disclosure Document; and maintain ownership or leasehold interest in the Bakery location or secure a suitable alternative. Terms of the then-current form of Franchise Agreement may differ materially from any and all of those contained in the Franchise Agreement attached to this Disclosure Document. |
| d. | Termination by franchisee | Section 21.1 | You can terminate only if we fail to cure a default under the Franchise Agreement within 90 days (or 150 days in some instances) after you give us written notice of termination. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 42–50)
What This Means (2025 FDD)
According to the 2025 Cinnaholic Franchise Disclosure Document, a franchisee can terminate the Franchise Agreement if Cinnaholic fails to correct a default. To do so, the franchisee must provide Cinnaholic with written notice of termination and allow 90 days (or 150 days in some instances) for Cinnaholic to cure the default.
This stipulation means that a Cinnaholic franchisee cannot immediately terminate the agreement upon discovering a default by Cinnaholic. They must first formally notify Cinnaholic of the issue and provide a substantial window for Cinnaholic to resolve the problem. This cure period is designed to give Cinnaholic a fair opportunity to rectify the situation and maintain the franchise relationship.
It is important for prospective Cinnaholic franchisees to understand this process, as it outlines the specific steps required before terminating the agreement due to Cinnaholic's default. Failure to follow these steps could result in an invalid termination and potential legal ramifications. Franchisees should carefully document all communications and actions taken during this process to ensure compliance with the agreement.