Is the Cinnaholic franchisor required to provide an accounting of supplier payments to the franchisee?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor and its affiliates may receive payments, discounts or other consideration from suppliers in consideration of such suppliers' dealings with Franchisee and/or the system of CINNAHOLIC® franchisees, and may use all amounts received by it without restriction.
Franchisor is not required to give Franchisee an accounting of supplier payments or to share the benefit of supplier payments with Franchisee or other CINNAHOLIC® franchisees.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, Cinnaholic is not required to provide franchisees with an accounting of any payments it receives from suppliers. This means that Cinnaholic may receive payments, discounts, or other forms of consideration from suppliers based on the suppliers' dealings with Cinnaholic franchisees.
The FDD specifies that Cinnaholic can use these amounts without any restrictions. Furthermore, Cinnaholic is not obligated to share any of the benefits from these supplier payments with its franchisees.
This arrangement is fairly common in franchising, where franchisors often negotiate discounts or rebates with suppliers based on the collective buying power of the franchise system. While Cinnaholic franchisees are required to purchase from approved suppliers, they do not have a right to know the details of any financial arrangements between Cinnaholic and those suppliers.