What constitutes 'routine litigation incidental to the business' that Cinnaholic considers acceptable for a party to have pending?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
O ACCEPT TERMS WHICH AS LESS FAVORABLE THAN THOSE SET FORTH IN THIS FRANCHISE DISCLOSURE DOCUMENT.**
2. The following is added at the end of Item 3::
Except as provided above, with regard to the franchisor, its predecessor, a person identified in Item 2, or an affiliate offering franchises under the franchisor's principal trademark:
- A.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 27–35)
What This Means (2025 FDD)
According to the 2025 Cinnaholic Franchise Disclosure Document, Cinnaholic considers 'routine litigation incidental to the business' as acceptable for a party to have pending. However, the FDD does not define or provide examples of what constitutes 'routine litigation incidental to the business.'
This is significant for potential franchisees because it means that Cinnaholic, its predecessors, individuals identified in Item 2, or affiliates offering franchises under Cinnaholic's trademark, may have pending legal actions that Cinnaholic deems routine. The FDD assures that these actions are not significant in the context of the number of franchisees, the size, nature, or financial condition of the franchise system or its business operations.
As the FDD lacks a clear definition, prospective franchisees should seek clarification from Cinnaholic regarding what specific types of lawsuits or claims are considered 'routine litigation.' Understanding this is crucial to assess the potential risks and liabilities associated with investing in a Cinnaholic franchise. Franchisees should inquire about the nature, frequency, and potential financial impact of such routine litigation to make an informed decision.
It is also important to note that the FDD explicitly states that no party has pending actions alleging a felony, a violation of franchise, antitrust, or securities law, fraud, embezzlement, fraudulent conversion, misappropriation of property, unfair or deceptive practices, or comparable civil or misdemeanor allegations. This provides some assurance that the franchisor is not involved in significant legal disputes of those types.