When is the Cinnaholic Development Fee payable?

e first Bakery franchised by you.

As discussed in Item 1 of this Disclosure Document, you must enter into a Development Agreement where you will commit to develop an agreed number of CINNAHOLIC® Bakeries consistent with the Development Schedule. When you sign the Development Agreement, you must pay us an upfront initial franchise fee of $40,000 for each Bakery that you agree to develop under the Development Agreement (the "Development Fee"), with the minimum number of bakeries being one. The Development Fee is payable in one lump sum when you sign the Development Agreement. If a Bakery is developed in accordance with the Development Schedule, the Development Fee attributable to that Bakery will be credited towards the payment of the initial franchise fee due under the Franchise Agreement. If a Bakery is not established in accordance with the Development Schedule, the Development Fee that would have otherwise been credited towards payment of the initial franchise fee for that Bakery will be forfeited and retained by us. If you and we are unable to agree upon a site for a Bakery and, as a result, you fail to meet your Development Schedule, we may terminate your Development Agreement. If, for any reason, the Development Agreement terminates before all or a portion of the Development Fee has been applied to the initial franchise fees, we will retain the unapplied portion of the Development Fee to compensate us for our time, effort and lost opportunities. The Development Fee is uniform for all franchisees purchasing through this Disclosure Document. We have no intention, now or in the future, of reducing the Development Fee for any prospective Franchisee, although we reserve the right to do so in our sole discretion on a case-by-case basis. The Development Fee is not

Source: Item 5 — INITIAL FEES (FDD pages 11–12)