Can Cinnaholic or its affiliates become authorized suppliers for Cinnaholic franchisees in the future?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
Currently, we do not intend to be, or to appoint any of our affiliates as, an authorized supplier of any products, supplies, equipment, or other items used in the operation of the Bakery. However, we reserve the right to designate ourselves and/or any of our affiliates as an approved supplier in the future, and we may even designate ourselves or an affiliate as the sole supplier of one or more items, in which case, you would have to buy the item from us or our affiliate at our or their then-current price. Our Operations Manual and other communications will identify our standards and specifications and the names of approved or designated suppliers. If we become a designated supplier, we may charge you a reasonable mark-up, surcharge, and handling fee on any items you purchase from us. Monies you pay to us will include a profit for us.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 21–25)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, Cinnaholic reserves the right to designate itself or its affiliates as approved suppliers in the future, and may even designate themselves or an affiliate as the sole supplier of one or more items. In such a case, franchisees would be required to purchase the item from Cinnaholic or their affiliate at their then-current price. If Cinnaholic becomes a designated supplier, they may charge a reasonable mark-up, surcharge, and handling fee on any items purchased from them, which would include a profit for Cinnaholic.
Currently, Cinnaholic does not intend to be, or to appoint any of its affiliates as, an authorized supplier of any products, supplies, equipment, or other items used in the operation of the Bakery. However, this policy could change. The Operations Manual and other communications will identify Cinnaholic's standards and specifications and the names of approved or designated suppliers.
This means that a Cinnaholic franchisee may be required to purchase certain items directly from the franchisor or its affiliates in the future. This could impact the franchisee's costs and potentially reduce their profit margin, depending on the pricing and fees charged by Cinnaholic or its affiliates. It is important for prospective franchisees to consider this potential change in supply arrangements and factor it into their financial projections. Franchisees should also inquire about the criteria Cinnaholic will use to determine pricing and fees if they become a designated supplier.