What must a Cinnaholic franchisee do if they lease the site for their Bakery?

According to Cinnaholic's 2025 Franchise Disclosure Document, if a franchisee chooses to lease the location for their bakery, they are required to collaterally assign the lease to Cinnaholic. This is done through a Collateral Assignment of Lease form, which must be signed by both the franchisee and the landlord. This assignment grants Cinnaholic the right, but not the obligation, to take possession of the bakery premises if the franchise agreement is terminated.

This requirement ensures that Cinnaholic has a mechanism to maintain control over the location of its franchises, even if a franchisee's agreement is terminated. By having the right to take possession of the premises, Cinnaholic can potentially continue operating a Cinnaholic bakery at that location or transfer the location to a new franchisee, minimizing disruption to the brand and customer base.

For a prospective franchisee, this means that leasing a site involves an additional layer of agreement with the landlord and Cinnaholic. It's crucial to carefully review the Collateral Assignment of Lease to understand the conditions under which Cinnaholic might exercise its right to take possession of the premises. This arrangement is fairly common in franchising, as it protects the franchisor's brand and investment in the location. Franchisees should consider this when negotiating lease terms with the landlord, ensuring that the terms are favorable and align with the franchise agreement.