Does Cinnaholic or any affiliate guarantee any obligations for franchisees?

According to the 2025 Cinnaholic Franchise Disclosure Document, Cinnaholic may require owners holding at least a 10% equity interest in the franchisee to personally guarantee the franchisee's obligations to Cinnaholic under the Development Agreement and the Franchise Agreement. These guarantees will be formalized through a Guaranty Agreement, which is included as an exhibit in both the Development Agreement and the Franchise Agreement.

This means that if a Cinnaholic franchisee fails to meet its financial or contractual obligations to Cinnaholic, Cinnaholic can seek recourse from the individuals who have provided a personal guarantee. This is a common practice in franchising, as it provides the franchisor with an additional layer of security and assurance that the franchisee will fulfill their commitments.

For a prospective Cinnaholic franchisee, this requirement has significant implications. Anyone acquiring a 10% or greater equity stake will need to be prepared to sign a personal guarantee, making them personally liable for the business's debts and obligations to Cinnaholic. It is essential to carefully review the Guaranty Agreement and understand the full extent of the personal liability before investing in a Cinnaholic franchise. Franchisees should seek legal and financial advice to fully understand the risks and obligations associated with providing a personal guarantee.