Does the Cinnaholic Development Agreement specify any events, other than franchisee default, that could lead to termination by the franchisor?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
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Franchise Agreement
| 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. |
| d. | Termination by franchisee | Section 21.1 | You can terminate only if we fail to cure a default under the Franchise Agreement within 90 days (or 150 days in some instances) after you give us written notice of termination. |
| e. | Termination by franchisor without cause | Not Applicable | Not Applicable. Termination of the Development Agreement does not allow for the termination of any then in force Franchise Agreement. Termination of any Franchise Agreement does not allow for termination of the Development Agreement, so long as Franchisee is otherwise in compliance with its development schedule. |
| f. | Termination by franchisor with cause | Sections 21.2 and 21.3 | We can terminate only if you default or if certain events (described in (g) and (h) below) occur. In some instances, you will have an opportunity to cure the default. Termination of the Development Agreement does not allow for the termination of any then in force Franchise Agreement. Termination of any Franchise Agreement does not allow for termination of the Development Agreement, so long as Franchisee is otherwise in compliance with its development schedule. |
| g. "Cause" defined – curable defaults | Section 21.3 | Failure to comply with our standards and procedures or any term of the Franchise Agreement not covered in "h" below, including: failure to submit required reports; failure to relocate; failure to comply with any of the terms and conditions of any other agreement entered into by you in connection with your Bakery; failure to maintain required insurance; and failure to restore Bakery to full operation if it is rendered inoperable by casualty. |
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 franchisor can terminate the franchise agreement if the franchisee defaults or if certain other events occur, as detailed in Sections 21.2 and 21.3 of the Franchise Agreement. These events are further clarified in subsections (g) and (h) of Item 17. Termination of the Development Agreement does not allow for the termination of any then in force Franchise Agreement. Termination of any Franchise Agreement does not allow for termination of the Development Agreement, so long as Franchisee is otherwise in compliance with its development schedule.
Curable defaults, outlined in Section 21.3, include failure to comply with Cinnaholic's standards and procedures or any term of the Franchise Agreement not covered under non-curable defaults. Examples of curable defaults are failure to submit required reports, failure to relocate, failure to comply with any agreement related to the Bakery, failure to maintain required insurance, and failure to restore the Bakery to full operation after a casualty. In these instances, the franchisee typically has 30 to 60 days after written notice to correct the default.
Non-curable defaults, as described in Section 21.2, include events such as insolvency, bankruptcy, liquidation, reorganization, making a general assignment for the benefit of creditors, or failure to pay Cinnaholic or any creditor, supplier, or lessor of the Bakery any sums due after written notification. Other non-curable defaults include conviction of a felony or crime involving moral turpitude, operating the Bakery as a safety hazard, making material misrepresentations, unauthorized transfer, failure to comply with non-competition and non-solicitation provisions, unauthorized use of any Mark or disclosure of confidential information, failure to comply with any applicable law, unauthorized seizures, failure to maintain possession of the Bakery premises, knowingly maintaining false books or records, denying access to books or records, understatement of fees by more than 5%, receipt of three default notices within a 12-month period, or dissolution. These defaults typically do not offer an opportunity to cure.