If Cinnaholic becomes the sole supplier of an item, is a Cinnaholic franchisee required to purchase the item from them?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
Except as described below, you are not obligated to purchase or lease from us, our designees or suppliers approved by us, or under our specifications, any goods, services, supplies, fixtures, equipment, inventory, computer hardware and software, or real estate relating to operating your Bakery. To ensure a uniform image and quality of products and services throughout CINNAHOLIC® franchise system, all food products, supplies, ingredients, equipment, furnishings, employee uniforms, fixtures, inventory, paper products, packaging, and other items used, sold, displayed or distributed in your Bakery (i) must comply with our standards and specifications and (ii) from suppliers designated or approved in writing by us. We may designate at any time and for any reason, a single or multiple suppliers for these items and require you to purchase exclusively from the designated supplier or suppliers, which exclusive designated supplier(s) may be us or an affiliate of ours. Currently, we do not intend to be, or to appoint any of our affiliates as, an authorized supplier of any products, supplies, equipment, or other items used in the operation of the Bakery. However, we reserve the right to designate ourselves and/or any of our affiliates as an approved supplier in the future, and we may even designate ourselves or an affiliate as the sole supplier of one or more items, in which case, you would have to buy the item from us or our affiliate at our or their then-current price. Our Operations Manual and other communications will identify our standards and specifications and the names of approved or designated suppliers. If we become a designated supplier, we may charge you a reasonable mark-up, surcharge, and handling fee on any items you purchase from us. Monies you pay to us will include a profit for us.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 21–25)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, franchisees are generally not obligated to purchase goods or services from Cinnaholic or its approved suppliers, but there are exceptions to this rule. To maintain uniformity and quality within the Cinnaholic franchise system, all items used in the bakery must adhere to Cinnaholic's standards and specifications and come from suppliers that Cinnaholic designates or approves in writing.
Cinnaholic reserves the right to designate single or multiple suppliers for specific items and require franchisees to purchase exclusively from those suppliers. These designated suppliers can include Cinnaholic itself or its affiliates. If Cinnaholic or an affiliate becomes the sole supplier of an item, franchisees are required to purchase that item from them at the then-current price.
While Cinnaholic currently does not intend to be an authorized supplier, they retain the right to change this in the future. If Cinnaholic does become a designated supplier, they may charge a reasonable markup, surcharge, and handling fee on items purchased by franchisees, which would include a profit for Cinnaholic. This arrangement is common in franchising, allowing franchisors to maintain quality control and potentially generate additional revenue.