What is a Cinnaholic franchisee required to do to assist the franchisor in complying with Anti-Terrorism Laws?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
42. FRANCHISEE'S ACKNOWLEDGMENTS
42.1. Anti-Terrorism Laws.
- (i) Franchisee 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, Franchisee 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 Franchisee 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) Franchisee 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.
Franchisee 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) Franchisee certifies that it has no knowledge or information that, if generally known, would result in (a) Franchisee, (b) Franchisee's owners, employees, agents, bankers or affiliates or (c) anyone associated with Franchisee to be listed in the Annex to Executive Order 13224.
(v) Franchisee is solely responsible for ascertaining what actions it must take to comply with the Anti-Terrorism Laws, and Franchisee specifically acknowledges and agrees that Franchisee's indemnification responsibilities set forth in Section 18 above of this Agreement pertain to Franchisee's obligations under this Section 42.2.
(vi) Any misrepresentation under this Section or any violation of the Anti-Terrorism Laws by Franchisee or Franchisee's owners, agents, bankers, employees and affiliates shall constitute grounds for immediate termination of this Agreement and any other agreement Franchisee has entered with Franchisor or an affiliate of Franchisor, in accordance with Section 21.2(xvi) above.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, franchisees and their owners must comply with Anti-Terrorism Laws and assist Cinnaholic in complying with these laws to the fullest extent possible. As part of this compliance, franchisees and their owners must certify, represent, and warrant that their property or interests are not subject to being "blocked" under any Anti-Terrorism Laws and that they are not in violation of any Anti-Terrorism Laws. These laws 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 requirements related to terrorist acts and acts of war. Franchisees must also certify that none of their employees, agents, bankers, affiliates, or anyone associated with them is listed in the Annex to Executive Order 13224 and agree not to hire or retain anyone listed in the Annex. The Annex can be accessed on the internet at the provided address. Franchisees must also certify that they have no knowledge or information that would result in themselves, their owners, employees, agents, bankers, affiliates, or anyone associated with them being listed in the Annex to Executive Order 13224. Franchisees are solely responsible for understanding and taking the necessary actions to comply with Anti-Terrorism Laws.
The agreement specifies that any misrepresentation or violation of Anti-Terrorism Laws by the franchisee, their owners, agents, bankers, employees, and affiliates constitutes grounds for immediate termination of the Franchise Agreement and any other agreements with Cinnaholic or its affiliates. This highlights the critical importance Cinnaholic places on adhering to these laws and ensuring all parties associated with the franchise do the same.
In practical terms, a prospective Cinnaholic franchisee must conduct thorough due diligence to ensure they, their business partners, and their employees are not in violation of or associated with any activities prohibited by Anti-Terrorism Laws. This includes regularly checking the Annex to Executive Order 13224 and staying informed about any updates or changes to relevant laws and regulations. The franchisee also agrees to indemnify Cinnaholic for any failures to comply with section 42.2 of the franchise agreement.
The franchisee bears the responsibility of understanding what actions they need to take to comply with Anti-Terrorism Laws. Given the complexity of these laws, it would be prudent for a prospective Cinnaholic franchisee to seek legal counsel to ensure full compliance and to mitigate the risk of inadvertent violations that could lead to termination of the franchise agreement.