What constitutes a default under the Cinnaholic Development Agreement regarding the Development Schedule?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
Developer must (i) establish and open the specified minimum number of Bakeries on or before each of the dates specified on the Development Schedule and (ii) maintain the specified minimum number of Bakeries in continuous operation as specified on the Development Schedule. Developer's failure to comply with the foregoing requirements shall constitute a default under this Agreement. Developer understands that time is of the essence with respect to its obligations to comply with the Development Schedule. Developer acknowledges and understands that this Agreement requires it to open Bakeries in the future pursuant to the Development Schedule. Developer further acknowledges and understands that the estimated investment requirement and fees and expenses set forth in Franchisor's franchise disclosure document are subject to increase and change over time, and that future Bakeries developed hereunder will most likely require a greater initial investment and increased operating capital than those detailed in the franchise disclosure document provided to Developer in connection with the execution of this Agreement.
Source: Item 23 — RECEIPT (FDD pages 62–269)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, a developer's failure to comply with the Development Schedule constitutes a default under the Development Agreement. Specifically, the developer must establish and open the specified minimum number of Cinnaholic bakeries on or before the dates outlined in the Development Schedule. Additionally, the developer must maintain the specified minimum number of bakeries in continuous operation as detailed in the Development Schedule.
This requirement means that a Cinnaholic developer is obligated to meet specific deadlines for opening new locations and ensuring existing locations remain operational. Failing to meet either of these conditions puts the developer in default of the agreement. Time is explicitly stated to be of the essence regarding compliance with the Development Schedule, emphasizing the importance of meeting these obligations promptly.
Prospective Cinnaholic developers should carefully review the Development Schedule (Exhibit A) to fully understand the required timelines and operational expectations. They should also consider that the estimated investment and fees outlined in the FDD may increase over time, potentially requiring a greater initial investment and increased operating capital for future bakeries developed under the agreement. This could impact their ability to adhere to the Development Schedule, so thorough financial planning is essential.