Is a Cinnaholic franchisee required to comply with Cinnaholic's payment instructions?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
. Upon the expiration or termination of this Agreement for any reason, Franchisee must return all copies of the Operations Manual to Franchisor, and upon Franchisor's request, certify to Franchisor that Franchisee has not kept any copies in any medium. The Operations Manual is confidential, copyrighted and Franchisor's exclusive property.
Franchisor may impose fines for Franchisee's failure to comply with the Operations Manual. Before any fine may be imposed, Franchisor must first have given Franchisee one written notice of the non-compliance with the Operations Manual; thereafter, any further non-compliance with that specific provision of the Operations Manual shall allow the imposition of a fine. Fines shall be in the amount of $100 to $1000, per violation, per day, as determined in Franchisor's sole discretion. However, Franchisor may elect to provide guidance in the Operations Manual regarding the amount of fines it may levy for given acts of noncompliance.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, franchisees must adhere to the franchisor's payment instructions. Specifically, franchisees are obligated to pay fines within ten days of receiving written notice. These fines, ranging from $100 to $1000 per violation per day, are imposed at Cinnaholic's discretion for non-compliance with the Operations Manual.
If a Cinnaholic franchisee fails to pay a levied fine within the specified ten-day period, Cinnaholic has the right to initiate an electronic funds transfer from the franchisee's bank account to cover the outstanding amount. This measure underscores the importance of timely payments and the franchisor's mechanisms for ensuring compliance.
Furthermore, the FDD states that failure to pay any fine within ten days constitutes a material default under the Franchise Agreement. This highlights the seriousness with which Cinnaholic views adherence to its payment terms and the potential consequences of non-compliance for franchisees.