What condition regarding default must a Cinnaholic franchisee meet to be eligible for renewal?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
val before commencing operation of the Bakery.
2. TERM AND RENEWAL
- 2.1. Initial Term. Unless terminated earlier in accordance with the terms and conditions set forth herein, this Agreement and the franchise granted hereunder shall have an initial term of 10 years commencing as of the Effective Date (the "Initial Term").
- 2.2. Renewal. Upon the expiration of the Initial Term, Franchisee shall have the right to renew the franchise granted hereunder for an additional 10 year period provided that all of the following conditions are met:
- (i) Franchisee gives Franchisor written notice of its election to renew the franchise not less than six months before the expiration of the Initial Term;
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, a franchisee must not be in default of any agreement to be eligible for renewal. Specifically, the franchisee cannot be in default of any provision of the Franchise Agreement itself, or any other agreement between the franchisee and Cinnaholic, its subsidiaries, or affiliates. This extends to agreements with any creditor or supplier of the Cinnaholic bakery, or any lessor or sublessor of the franchised site.
Furthermore, the franchisee must have fully and faithfully performed all of its obligations under the Franchise Agreement and all other related agreements throughout their terms. This means that the franchisee must have consistently met all requirements and responsibilities outlined in these agreements from the beginning of the initial term.
In practical terms, a Cinnaholic franchisee needs to maintain a strong record of compliance and financial responsibility to qualify for renewal. Any unresolved defaults or failures to meet obligations could jeopardize the franchisee's opportunity to extend the franchise agreement for an additional 10-year period. This condition underscores the importance of diligent management and adherence to all contractual terms throughout the initial term of the franchise.