How does the Cinnaholic Development Agreement define the length of the franchise term?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary | |
|---|---|---|---|
| a. | Length of the franchise term | Section 2.1 | 10 years |
| b. | Renewal or extension of the term | Section 2.2 | If you meet the requirements, you can renew for one additional consecutive 10 year term; after that you will have no right to renew the Franchise Agreement. |
| c. | Requirements for franchisee to renew or extend | Section 2.2 | You must: provide written notice of election to renew; not be in default of the Franchise Agreement or any other agreement relating to the Bakery; sign the then-current form of Franchise Agreement; pay a renewal fee; refurbish the Bakery, if required; complete any required retraining program; sign the current form of general release in Exhibit J to this Disclosure Document; and maintain ownership or leasehold interest in the Bakery location or secure a suitable alternative. Terms of the then-current form of Franchise Agreement may differ materially from any and all of those contained in the Franchise Agreement attached to this Disclosure Document. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 42–50)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the initial length of the franchise term is 10 years, as detailed in Section 2.1 of the Franchise Agreement. Upon meeting specific requirements outlined in Section 2.2, a franchisee has the option to renew the agreement for one additional, consecutive 10-year term. After this renewal, there is no further right to renew the Franchise Agreement.
The requirements for renewal include providing written notice of the election to renew, not being in default of the Franchise Agreement or any other agreement related to the bakery, and signing the then-current form of the Franchise Agreement. Additionally, the franchisee must pay a renewal fee, refurbish the bakery if required, complete any necessary retraining programs, sign the current form of a general release (Exhibit J), and maintain ownership or a leasehold interest in the bakery location or secure a suitable alternative.
It is important to note that the terms of the then-current form of the Franchise Agreement may differ significantly from those contained in the original Franchise Agreement attached to the Disclosure Document. This means that while a franchisee has the option to renew, the terms under which they operate the Cinnaholic bakery could change substantially, potentially impacting profitability, operational requirements, and other key aspects of the business. Prospective franchisees should carefully consider these potential changes and factor them into their long-term business plans.
In the franchise industry, it is common for franchise agreements to have a set initial term, often around 10 years, with options for renewal. However, the specific conditions and requirements for renewal, as well as the potential for changes in the agreement's terms, can vary widely. Therefore, it is crucial for prospective Cinnaholic franchisees to thoroughly review and understand all the terms and conditions related to renewal before investing in the franchise.