What fee might a Cinnaholic franchisee or proposed supplier have to pay in advance for evaluation, testing, and inspections?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
If (i) you wish to purchase any item from a supplier (manufacturer or distributor and service providers, such as food delivery services or applications) we have not previously approved or an item that does not comply with our standards and specifications and (ii) the item has not been designated by us to be exclusively supplied by a designated supplier(s), you must first submit to us a written request for approval. We will establish a procedure for submitting these requests. We will require the proposed supplier to provide us with certain financial and operational information and other information regarding the supplier and the items to be approved. In addition, the proposed supplier must permit our representatives to inspect its facilities (e.g. business offices and/or manufacturing facilities, as applicable). Before we approve a supplier, we will evaluate the economic terms of a possible relationship and ensure that the proposed supplier meets our requirements. We reserve the right, at our option, and at the proposed supplier's expense, to inspect or re-inspect the facilities, equipment, and raw materials of any supplier, at any time. The proposed supplier or you must pay, in advance, a fee not to exceed the reasonable cost of any evaluation, testing, and inspections we undertake. Within a reasonable time frame after we receive the completed request and after we complete any evaluation and inspection or testing, (approximately 45 days), we will notify you in writing of our approval or disapproval of the proposed supplier or item. Generally, we will respond to your requests for supplier approval within a reasonable time period not to exceed 90 days. We are not required to approve any supplier or item not meeting our standards and specifications. We may deny approval for any reason, including our determination to limit the number of approved suppliers. You must not use, offer for sale or sell any of the proposed supplier's products or any other product that does not meet our standards or specifications until you receive our written approval of the proposed supplier or item.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 21–25)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, if a franchisee wishes to use a supplier not already approved by Cinnaholic, or an item that doesn't meet Cinnaholic's standards, they must seek approval. As part of this process, either the proposed supplier or the franchisee is required to pay in advance a fee to cover the reasonable costs of any evaluation, testing, and inspections that Cinnaholic undertakes.
This fee is intended to cover Cinnaholic's expenses in ensuring that new suppliers and products meet their standards. The FDD does not specify a fixed amount for this fee, but it states that it will not exceed the reasonable cost of the evaluation, testing, and inspections. After Cinnaholic receives the completed request, and completes its evaluation, inspection, and testing, they will notify the franchisee in writing of their approval or disapproval, typically within approximately 45 days, but no more than 90 days.
This requirement ensures that Cinnaholic maintains control over its supply chain and product quality. For a prospective franchisee, this means that using unapproved suppliers or products could incur additional costs and delays. It is important to factor in this potential expense when considering alternative suppliers, and to weigh the benefits against the cost of the approval process. Franchisees should discuss with Cinnaholic what typical costs for evaluation, testing, and inspections have been for other franchisees to get a sense of the potential financial impact.
It is also important to note that Cinnaholic reserves the right to deny approval for any reason, including limiting the number of approved suppliers. This means that even if a franchisee or supplier is willing to pay for the evaluation, there is no guarantee of approval. Franchisees must not use or sell any products from a proposed supplier until written approval has been received from Cinnaholic.