If a Cinnaholic franchisee retains possession of the franchised site after termination or expiration, who bears the expense of modifying the site's decor?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
overnmental authority having jurisdiction over this Agreement limit Franchisee's ability to pay, and Franchisor's ability to receive, such liquidated damages, Franchisee shall be liable to Franchisor for any and all damages which it incurs, now or in the future, as a result of Franchisee's default under this Agreement.
22.2. Obligations upon Termination or Expiration. Upon the termination or expiration of this Agreement, whether by reason of lapse of time, default in performance, abandonment of the Bakery or other cause or contingency, Franchisee shall:
- (i) forthwith return to Franchisor all material furnished by Franchisor containing confidential information, operating instructions, business practices, or methods or procedures, including, without limitation, the Operations Manual;
- (ii) discontinue at the Franchised Site all use of the Marks, and the use of any and all signs, products, paper goods and other items bearing the Marks.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, if a franchisee retains possession of the franchised site after the franchise agreement terminates or expires, the franchisee is responsible for the expenses associated with modifying the site's decor. The franchisee must make reasonable modifications to both the exterior and interior of the bakery to eliminate any identification as a Cinnaholic bakery. This includes removing or covering any signs bearing Cinnaholic's trademarks.
This requirement ensures that the public is not misled into thinking the terminated or expired franchise is still affiliated with Cinnaholic. It also prevents any violation of the non-compete agreement that the franchisee is subject to after termination or expiration. The modifications must meet Cinnaholic's standards for de-identification.
Furthermore, if the franchisee fails to make these required modifications, Cinnaholic has the right to take action to modify the site itself. In this case, the franchisee will be responsible for immediately paying Cinnaholic the costs incurred for these modifications. This provision protects Cinnaholic's brand identity and ensures consistent compliance even if a franchisee is unwilling to cooperate.
In summary, a Cinnaholic franchisee bears the full financial responsibility for any modifications needed to remove Cinnaholic branding from a location they retain after the franchise agreement ends. This includes both the initial modifications and any subsequent costs incurred by Cinnaholic if the franchisee fails to comply.