What must a Cinnaholic franchisee do in connection with the lease or sublease for the Franchised Site?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
anted to Franchisee hereunder shall be non-exclusive and shall be restricted to the operation of a single CINNAHOLIC® Bakery to be located at the address and location set forth on Exhibit A attached hereto (the "Franchised Site"). During the term of this Agreement, the Franchised Site shall be used exclusively to operate a Bakery. In connection with the execution of any lease or sublease for the Franchised Site, Franchisee must execute, and cause the lessor and/or sublessor of the Franchised Site to execute, the Collateral Assignment of Lease attached to the Market Development Agreement entered into between Franchisor and Franchisee (the "Development Agreement"), in addition to complying with any other obligations and conditions contained in the Development Agreement relating to the lease or sublease of the Franchised Site and the development and construction of the Bakery. The rights granted to Franchisee are for the specific Franchised Site and cannot be transferred to any other location, except with Franchisor's prior w
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, a franchisee must execute the Collateral Assignment of Lease attached to the Market Development Agreement when signing any lease or sublease for the Franchised Site. The franchisee must also ensure that the lessor or sublessor of the Franchised Site executes this Collateral Assignment of Lease. Additionally, the franchisee must comply with all other obligations and conditions contained in the Development Agreement related to the lease or sublease of the Franchised Site and the development and construction of the Bakery.
This requirement ensures that Cinnaholic has certain rights and protections related to the franchisee's location. By having the lease collaterally assigned, Cinnaholic may have the ability to take over the lease if the franchisee defaults on their obligations to Cinnaholic. This protects Cinnaholic's brand and ensures continued operation at that location if the franchisee fails.
Furthermore, after signing the lease, the franchisee will pay Cinnaholic a Project Management Fee, which is currently $1,795. In return, Cinnaholic will assist in developing the Bakery site by monitoring construction and build-out progress, identifying potential bottlenecks, and helping expedite pre-construction activities. This fee and assistance can be beneficial for franchisees who may not have experience in site development and construction, but it also represents an additional upfront cost.