Who bears the risk and responsibility for any obligations or liabilities incurred before Cinnaholic approves the bakery location in writing and sends the countersigned Franchise Agreement?

According to Cinnaholic's 2025 Franchise Disclosure Document, the developer bears the sole risk and responsibility for any obligations or liabilities incurred with respect to the proposed bakery or location before Cinnaholic provides written approval and sends the countersigned Franchise Agreement. This means that until Cinnaholic formally approves the site and the franchise agreement is fully executed, the developer is fully responsible for any financial or legal issues that may arise.

This allocation of risk is a critical consideration for prospective Cinnaholic franchisees. Before securing Cinnaholic's final approval, franchisees might incur expenses related to site evaluation, preliminary negotiations, or even initial build-out activities. Should Cinnaholic ultimately reject the site or the franchise agreement, the franchisee would have to absorb these costs without any recourse from Cinnaholic.

Therefore, it is crucial for developers to conduct thorough due diligence and seek preliminary feedback from Cinnaholic on potential locations before committing significant resources. While Cinnaholic may offer counseling and advisory services during site selection, they are not liable for any advice provided. This underscores the importance of independent assessment and careful planning on the part of the developer to mitigate potential losses before formal approval is granted.