What must a Cinnaholic franchisee do under the Development Agreement?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
You must enter into a Market Development Agreement, the current form of which is attached to this Disclosure Document as Exhibit B (the "Development Agreement"). Under the Development Agreement, you must develop, open and operate an agreed upon number of Bakeries located in an area of responsibility (the "Area of Responsibility") in accordance with an agreed upon development schedule (the "Development Schedule"). You must enter into a Development Agreement even if you will establish only one Bakery. There is no preset minimum or maximum number of Bakeries that you may agree to establish in connection with a Development Agreement. The number of Bakeries to be developed is negotiated between you and us on a case-by-case basis. The Development Agreement will expire on the day after operations of the final Bakery to be established under the Development Agreement are required to begin as provided on the Development Schedule. The Development Agreement will not grant any protected territory, exclusivity or other rights in which to establish your Bakeries in the Area of Responsibility. You may establish your Bakeries at any location within the Area of Responsibility provided we consent to the location, which may be withheld or granted in our sole discretion, the location is in a state where we are permitted to sell CINNAHOLIC® franchises, and the Bakery is not located in the franchise territory granted to another CINNAHOLIC® franchisee. Within our sole discretion, we may consider a location proposed by you outside your Area of Responsibility.
You will operate each Bakery to be developed under the Development Agreement under a separate Franchise Agreement. Upon establishing each additional outlet under the Development Agreement, a developer may be required to sign a then-current Franchise Agreement, which may differ from the current Franchise Agreement included within this FDD. The Franchise Agreement will grant you a protected territory (the "Franchise Territory"), the size and scope of which will be determined on a case-by-case basis by considering the population, traffic flow, presence of businesses, location of competitors (including other CINNAHOLIC® franchisees), demographics and other market conditions surrounding the location of the Bakery. The Franchise Territory may not be unilaterally altered, and the continuation of the Franchise Territory during the term of the Franchise Agreement does not depend on a certain sales or revenue volume or market penetration.
Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 6–8)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the Development Agreement mandates that the franchisee develop, open, and operate a specific number of Cinnaholic bakeries within a designated area of responsibility, following an agreed-upon development schedule. This agreement is required even if the franchisee intends to establish only one bakery. The number of bakeries to be developed is determined through negotiations between the franchisee and Cinnaholic. The Development Agreement remains in effect until the day after the final bakery's operations are scheduled to begin, as outlined in the development schedule.
It is important to note that the Development Agreement does not grant the franchisee any exclusive territory or protected rights within the area of responsibility. The franchisee can establish bakeries at any location within the designated area, provided that Cinnaholic approves the location, the location is in a state where Cinnaholic is permitted to sell franchises, and the bakery is not located in another franchisee's protected territory. Cinnaholic retains the discretion to approve or deny a proposed location. Additionally, Cinnaholic may consider locations outside the franchisee's area of responsibility at its discretion.
Each bakery developed under the Development Agreement will operate under a separate Franchise Agreement. Upon establishing each additional outlet, the developer may be required to sign a then-current Franchise Agreement, which may differ from the current Franchise Agreement included within the FDD. The Franchise Agreement will grant a protected territory, the size and scope of which will be determined on a case-by-case basis by considering factors such as population, traffic flow, presence of businesses, location of competitors, demographics and other market conditions surrounding the location of the Bakery. The Franchise Territory may not be unilaterally altered, and the continuation of the Franchise Territory during the term of the Franchise Agreement does not depend on a certain sales or revenue volume or market penetration.