What happens if a Cinnaholic developer fails to maintain the minimum number of Bakeries required by the Development Schedule?

According to Cinnaholic's 2025 Franchise Disclosure Document, failing to maintain the minimum number of bakeries in continuous operation as required by the Development Schedule constitutes a default under the Development Agreement. The Development Schedule outlines the dates by which a developer must establish and open a specific minimum number of Cinnaholic bakeries and maintain that minimum number in continuous operation.

This requirement is critical because Cinnaholic grants developers the right to establish and operate a specific number of bakeries within a defined area, as detailed in Exhibit A of the Development Agreement. The agreement emphasizes that adhering to the Development Schedule is essential, with time being of the essence. This means Cinnaholic places a high priority on developers meeting the agreed-upon milestones for opening and maintaining bakeries.

If a developer fails to meet these requirements, it triggers a default under the Development Agreement, potentially leading to termination of the agreement. In addition to failing to maintain the minimum number of bakeries, other actions that can trigger a default include failing to open bakeries according to the Development Schedule, failing to pay amounts owed to Cinnaholic or its affiliates, or failing to comply with applicable laws and regulations. Prospective developers should carefully review the Development Schedule and ensure they have the resources and capabilities to meet the required milestones to avoid defaulting on their agreement with Cinnaholic.