What is the amount of the Development Fee payable to Cinnaholic?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
MENT UNDER A MARKET DEVELOPMENT AGREEMENT
| Type of Expenditure | Amount | Method of Payment | When Due | To Whom Payment Is To Be Made | |
|---|---|---|---|---|---|
| Development Fee | $120,000 | Lump Sum | Paid upon signing the Development Agreement | Us | |
| (See Note 1) | |||||
| Total Estimated Initial Investment (See Note 2) | $120,000 |
Note 1: The above chart assumes you sign a development agreement for three Bakeries, but you could agree to open as many as you wish, there is no maximum. The development fee will depend on the number of Bakeries you develop, meaning that the total will equal the number of Bakeries you wish to open times the initial franchise fee of $40,000. As discussed in Item 5 of this Disclosure Document, you will pay a Development Fee based on the number of Bakeries you must develop under the Development Agreement. The minimum number of Bakeries being one. In most circumstances, the Development Fee is credited against the initial franchise fee you must pay for each Bakery developed and opened according to your Development Schedule.
Note 2: Each additional Bakery that is opened will necessitate a repetition of the types of expenditures that are included in the first table in Item 7. The amount of these expenditures will fluctuate based on when each Franchise Agreement is signed.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 18–21)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the Development Fee is $120,000. This fee is paid in a lump sum upon signing the Development Agreement and is paid directly to Cinnaholic. The document also mentions that the initial franchise fee is $40,000 for each bakery. If a franchisee signs a development agreement for three bakeries, the development fee will depend on the number of bakeries they develop. This means the total will equal the number of bakeries the franchisee wishes to open multiplied by the initial franchise fee.
Item 5 of the FDD states that a Development Fee is based on the number of bakeries the franchisee must develop under the Development Agreement, with a minimum of one bakery. In most cases, the Development Fee is credited against the initial franchise fee for each bakery developed and opened according to the Development Schedule. However, if a bakery isn't established according to the schedule, the Development Fee that would have been credited towards the initial franchise fee for that bakery will be forfeited and retained by Cinnaholic.
Prospective franchisees should carefully consider the implications of the Development Agreement and Development Schedule. Failure to meet the schedule could result in the loss of the Development Fee for any unestablished bakeries. It is important to discuss the terms of the Development Agreement with Cinnaholic to fully understand the obligations and potential risks involved.