Can the Cinnaholic franchisor receive payments from suppliers based on the suppliers' dealings with franchisees?

According to Cinnaholic's 2025 Franchise Disclosure Document, Cinnaholic and its affiliates have the right to receive payments, discounts, or other forms of consideration from suppliers in exchange for those suppliers' business dealings with Cinnaholic franchisees or the Cinnaholic system as a whole. Cinnaholic is not obligated to share these payments with franchisees or provide an accounting of them. This arrangement allows Cinnaholic to benefit financially from the supply chain relationships established within its franchise network.

For a prospective franchisee, this means that Cinnaholic may profit from the products and supplies that franchisees are required to purchase. While this is a potential revenue stream for the franchisor, it also means that franchisees may not always receive the lowest possible prices on goods if the supplier is providing a kickback to Cinnaholic. This practice is relatively common in franchising, but it's important for franchisees to understand that the franchisor may have a financial incentive to select certain suppliers over others.

It is also important to note that Cinnaholic has the right to designate itself as a supplier and earn a profit on any items it supplies to franchisees. This dual role as both franchisor and supplier could create a conflict of interest, as Cinnaholic may be incentivized to prioritize its own profits over the best interests of its franchisees. Franchisees should carefully consider these factors and evaluate the overall cost of goods and supplies when assessing the financial viability of a Cinnaholic franchise.