What happens if a Cinnaholic developer violates any health or safety law?

According to the 2025 Cinnaholic Franchise Disclosure Document, if a developer fails to comply with any federal, state, or local law or regulation applicable to the operation of the franchise, including any failure to comply with Anti-Terrorism Laws, it constitutes grounds for immediate termination of the Development Agreement by Cinnaholic. This termination can occur without an opportunity for the developer to correct the failure.

This means that a Cinnaholic developer must ensure strict adherence to all health and safety laws, as any violation, regardless of severity, could lead to the immediate loss of their development rights. This is a significant risk for developers, as even unintentional or minor infractions could have severe consequences. The FDD highlights the importance Cinnaholic places on compliance and the protection of its brand reputation.

Furthermore, the FDD states that controversies, claims, or disputes based on a developer's violation of any health or safety law are exempt from mandatory arbitration. This means that Cinnaholic can pursue legal action against a developer in court for health and safety violations, rather than being required to resolve the issue through arbitration. This clause gives Cinnaholic more direct control over how such violations are addressed and potentially allows for quicker resolution and stricter penalties.

Prospective Cinnaholic developers should carefully review all applicable health and safety laws and regulations and implement robust compliance programs to minimize the risk of violations. They should also understand that Cinnaholic reserves the right to terminate the Development Agreement immediately for any such non-compliance, and can pursue legal action in court.