What happens if a Cinnaholic franchisee fails to meet their development schedule under the Development Agreement?

According to Cinnaholic's 2025 Franchise Disclosure Document, if a franchisee fails to meet the development schedule outlined in their Development Agreement, Cinnaholic has the right to terminate the agreement. This means that the franchisee would lose the rights to develop Cinnaholic bakeries within their Area of Responsibility.

Under the Development Agreement, franchisees are assigned an Area of Responsibility where they are expected to focus their development efforts. However, it's important to note that this agreement does not grant an exclusive territory. Cinnaholic retains the authority to approve the location of future units, and the standards for sites and territories at that time will apply. The franchisee can propose a location within their Area of Responsibility, but Cinnaholic has the sole discretion to approve or deny it, provided the location is in a state where Cinnaholic is permitted to sell franchises and is not within another franchisee's territory.

This lack of exclusivity and the potential for termination due to unmet development schedules highlight the importance of carefully planning and executing the development of multiple Cinnaholic locations. Prospective franchisees should be aware that failing to meet the agreed-upon development timeline could result in the loss of their development rights, emphasizing the need for a realistic and achievable development plan.