Does the Cinnaholic FDD specify any exceptions to the requirement for franchisees to comply with Anti-Terrorism Laws?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
- (i) Developer and its owners agree to comply with and/or to assist Franchisor to the fullest extent possible in Franchisor's efforts to comply with Anti-Terrorism Laws. In connection with such compliance, Developer and its owners certify, represent, and warrant that none of their property or interests is subject to being "blocked" under any of the Anti-Terrorism Laws and that Developer and its owners are not otherwise in violation of any of the Anti-Terrorism Laws.
- (ii) "Anti-Terrorism Laws" means Executive Order 13224 issued by the President of the United States ("Executive Order 13224"), the Terrorism Sanctions Regulation (Title 31, Part 595 of the U.S. Code of Federal Regulations), the Foreign Terrorist Organizations Sanctions Regulations (Title 31, Part 597 of the U.S. Code of Federal Regulations), the Cuban Assets Control Regulations (Title 31, Part 515 of the U.S. Code of Federal Regulations), the USA PATRIOT Act, and all other present and future federal, state and local laws, ordinances regulations, policies, lists and any other requirements of any governmental authority (including, without limitation, the United States Department of Treasury Office of Foreign Assets Control, and any other government agency with jurisdiction over the parties to this Agreement and/or their actions) addressing or in any way relating to terrorist acts and/or acts of war.
- (iii) Developer and its owners certify that none of them, their respective employees, agents, bankers, affiliates or anyone associated with them is listed in the Annex to Executive Order 13224. Developer agrees not to hire (or, if already employed, retain the employment of) any individual who is listed in the Annex. (A copy of the Annex can be accessed on the internet at the following address: http://www.treasury.gov/offices/enforcement/ofac/sanctions/terrorism.html.)
- (iv) Developer certifies that it has no knowledge or information that, if generally known, would result in (a) Developer, (b) Developer's owners, employees, agents, bankers or affiliates or (c) anyone associated with Developer to be listed in the Annex to Executive Order 13224.
- (v) Developer is solely responsible for ascertaining what actions it must take to comply with the Anti-Terrorism Laws.
- (vi) Any misrepresentation under this Section or any violation of the Anti-Terrorism Laws by Developer or Developer's owners, agents, bankers, employees and affiliates shall constitute grounds for immediate termination of this Agreement and any other agreement Developer has entered with Franchisor or an affiliate of Franchisor, in accordance with Section 12.2(xiii) above.
Source: Item 23 — RECEIPT (FDD pages 62–269)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, there are no explicit exceptions to the requirement for franchisees to comply with Anti-Terrorism Laws. The FDD emphasizes the franchisee's (referred to as "Developer") responsibility to fully comply with these laws. The franchisee must also assist Cinnaholic in its compliance efforts. The franchisee must certify that their property and interests are not subject to being "blocked" under any Anti-Terrorism Laws and that they are not in violation of these laws.
The Anti-Terrorism Laws, as defined in the FDD, include Executive Order 13224, the Terrorism Sanctions Regulation, the Foreign Terrorist Organizations Sanctions Regulations, the Cuban Assets Control Regulations, the USA PATRIOT Act, and all other present and future federal, state, and local laws related to terrorist acts and acts of war. The franchisee must also certify that they, their employees, agents, bankers, affiliates, or anyone associated with them are not listed in the Annex to Executive Order 13224 and agree not to hire anyone listed in the Annex.
The franchisee is solely responsible for understanding and taking the necessary actions to comply with Anti-Terrorism Laws. Any misrepresentation or violation of these laws by the franchisee or their associated parties constitutes grounds for immediate termination of the franchise agreement. This strict adherence to Anti-Terrorism Laws is a condition of the franchise agreement, and failure to comply can have severe consequences.
Prospective Cinnaholic franchisees should be aware of the comprehensive nature of these requirements and the potential consequences of non-compliance. It is advisable to seek legal counsel to fully understand the obligations under Anti-Terrorism Laws and to ensure ongoing compliance throughout the term of the franchise agreement. This requirement appears to be stricter than some franchise agreements, where the obligation to comply with laws is more general and does not specifically call out Anti-Terrorism Laws.