What is the Cinnaholic franchisee's obligation regarding the condition of the Cinnaholic Bakery's equipment?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
WHEREAS, the distinguishing features of the CINNAHOLIC® System, include, but are not limited to, the name "CINNAHOLIC®" and all such other trade names, trademarks, service marks, logos, emblems, insignia and signs developed for use with the CINNAHOLIC® System from time to time (collectively, the "Marks"); specially designed fixtures, equipment, facilities, containers, and other items used in serving and dispensing food products; products, methods, procedures, recipes, distinctive food products and the formula and quality standards therefor; and instructional materials and training courses; all of which may be changed, improved and further developed by Franchisor from time to time;
- (xvii) Without limiting any of Franchisee's other obligations under this Agreement, at the request of Franchisor, but not more often than once every 5 years, unless sooner required by Franchisee's lease, Franchisee shall refurbish the premises of the Bakery at its expense, to conform to the Bakery, trade dress, color schemes and presentation of the Marks in a manner consistent with the thencurrent image for new Bakeries ("Refurbishments").
Refurbishments may include structural changes, installation of new equipment and signs, remodeling, redecoration and modifications to existing improvements.
Refurbishments are intended to be large-scale re-equipping, refurbishing and remodeling of the Bakery, and nothing contained in this Subsection (xvii) of this Agreement will limit Franchisee's other obligations under this Agreement or the Operations Manual.
17. MAINTENANCE OF CREDIT STANDING
The failure or repeated delay in making prompt payments in accordance with the terms of invoices and statements rendered to Franchisee for purchases of supplies, equipment and other items, whether purchased from Franchisor or others, or defaults in making payments due hereunder or under any other agreement entered into in connection with the operation of the Bakery, will result in a loss of credit rating and standing which will be detrimental to Franchisor and other franchisees of the CINNAHOLIC® System. Franchisee agrees to pay when due all amounts which it owes to anyone for supplies, equipment and other items used in connection with the Bakery and all payments owed hereunder or under any other agreement entered into in connection with the operation of the Bakery.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to the 2025 Cinnaholic Franchise Disclosure Document, franchisees are generally responsible for maintaining the standards of the Cinnaholic system, which includes the equipment used in the bakery. While the document does not explicitly detail routine equipment maintenance, it emphasizes the importance of adhering to Cinnaholic's standards and specifications, suggesting that franchisees must keep their equipment in good working order to meet these standards.
Cinnaholic franchisees may be required to refurbish their premises, including the installation of new equipment, at their own expense. This refurbishment can be requested by Cinnaholic, but not more often than once every 5 years, unless required sooner by the franchisee's lease. These refurbishments are intended to be large-scale re-equipping, refurbishing, and remodeling of the bakery to maintain the current image for new Cinnaholic bakeries.
Furthermore, the FDD states that failure to make prompt payments for equipment purchases, whether from Cinnaholic or other suppliers, can negatively impact the franchisee's credit standing and the Cinnaholic system's reputation. Franchisees are obligated to pay all amounts owed for equipment and supplies used in connection with the bakery. This implies that franchisees are responsible for the financial obligations associated with maintaining and updating their equipment.
In summary, while the FDD does not provide explicit details on day-to-day equipment maintenance, it makes it clear that Cinnaholic franchisees are responsible for keeping their equipment in good condition to meet Cinnaholic's standards, for covering the costs of periodic refurbishments that may include new equipment, and for paying for equipment purchases on time.