What happens if a Cinnaholic franchisee doesn't provide financial reports?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
All reports or other information required to be submitted under this Section 6.2 shall be submitted to the attention of Franchisor's franchise department. If any of the reports or other information required to be given to Franchisor in accordance with this Section are not received by Franchisor by the required deadline, Franchisor may charge Franchisee a late submission fee equal to $100.00.
Failure to pay any fine within ten days shall be a material default under this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, franchisees are required to provide specific financial reports to Cinnaholic. These reports include a weekly statement of gross sales, monthly unaudited balance sheets and profit and loss statements, and annual financial statements compiled or reviewed by an independent certified public accountant. These reports must adhere to the forms and accounting principles specified by Cinnaholic.
If a Cinnaholic franchisee fails to submit these required reports or other information by the specified deadlines, Cinnaholic may charge a late submission fee of $100.00. This fee serves as a penalty for non-compliance and is intended to encourage timely submission of financial data. All reports must be submitted to the attention of Cinnaholic's franchise department.
Furthermore, failure to pay any fines, including those related to late submission of reports, within ten days of written notice from Cinnaholic constitutes a material default under the Franchise Agreement. This means that Cinnaholic could take further action against the franchisee for breaching the agreement. Franchisees should, therefore, prioritize the timely and accurate submission of all required financial reports to avoid penalties and potential default.