If Cinnaholic Franchisor changes its image or standards of operation, what is the franchisee's obligation?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
r. If the fine is not paid within that time, Franchisor may cause an electronic funds transfer from Franchisee's bank account for the amount of any fine. Failure to pay any fine within ten days shall be a material default under this Agreement.
8. MODIFICATION AND IMPROVEMENTS TO THE CINNAHOLIC® SYSTEM
8.1. Modification by Franchisor. Franchisee recognizes and agrees that from time to time hereafter, Franchisor may change, modify or improve the CINNAHOLIC® System, including, without limitation, modifications to the Operations Manual, the menu and format, the processes and systems to support the business, the menu items and other product ingredients, the products offered for sale, the required equipment, the signage, the presentation and usage of the Marks, and the adoption and use of new, modified or substituted Marks or other proprietary materials. Franchisee agrees to accept, use and/or display for the purposes of this Agreement any such changes, modifications or improvements to the CINNAHOLIC® System, including, without limitation the adoption of new, modified or substituted Marks, as if they were part of the CINNAHOLIC® System as of the Effective Date, and Franchisee agrees to make such expenditures as such changes, modifications or improvements to the CINNAHOLIC® System may require. For purposes of this Agreement, all references to the CINNAHOLIC® System shall include such future changes, modifications and improvements.
8.2. Modification by Franchisee. If Franchisee develops any new modification, concept, process, improvement or slogan in the operation or promotion of the Bakery or to the CINNAHOLIC® System, the same shall be deemed a work made for hire, and Franchisee shall promptly notify Franchisor of, and provide Franchisor with all necessary information, regarding such modification, concept, process, improvement or slogan, without compensation to Franchisee. Franchisee acknowledges that any such modification, concept, process, improvement or slogan shall become Franchisor's sole and exclusive property and that Franchisor may use or allow other franchisees to use the same in connection with the CINNAHOLIC® System or the operation of CINNAHOLIC® Bakeries, without compensation to Franchisee.
9. OBLIGATIONS OF FRANCHISEE
Franchisee recognizes the mutual benefit to Franchisee, Franchisor and other franchisees of the CINNAHOLIC® System of the uniformity of the appearance, services, products and advertising of the CINNAHOLIC® System and acknowledges and agrees that such uniformities are necessary for the successful operation of CINNAHOLIC® Bakeries. Franchisee also acknowledges and agrees that products and services sold under the Marks and at CINNAHOLIC® Bakeries have a reputation for excellence. This reputation has been developed and maintained by Franchisor, and Franchisee acknowledges and agrees that it is of the utmost importance to Franchisor, Franchisee, and all other franchisees of the CINNAHOLIC® System that such reputation be maintained. To this end, Franchisee covenants and warrants with respect to the operation of the Bakery that Franchisee and its employees and agents will comply with all of the requirements of the CINNAHOLIC® System and the Operations Manual and will throughout the term of this Agreement:
- (i) Operate the Bakery and prepare and sell all products and services sold therein in accordance with the specifications, standards, business practices and policies of Franchisor now in effect or hereafter promulgated, and comply with all requirements of Franchisor, the CINNAHOLIC® System and the Operations Manual as they are now or hereafter established, including, without limitation, any health, sanitation and cleanliness standards and specifications. Franchisor and its duly authorized representatives shall have the right, if they so elect, at all reasonable times, to enter and inspect the Bakery to ensure that Franchisee is complying with such specifications, standards, business practices, policies and requirements and to test any and all equipment, systems, products and ingredients used in connection with the operation of the Bakery.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, Cinnaholic may modify the CINNAHOLIC® System from time to time, including changes to the Operations Manual, menu, format, processes, systems, menu items, product ingredients, products offered for sale, required equipment, signage, presentation and usage of the Marks, and the adoption of new, modified or substituted Marks or other proprietary materials. The franchisee must accept, use and/or display any such changes, modifications or improvements to the CINNAHOLIC® System, including adopting new, modified, or substituted Marks. The franchisee also agrees to make such expenditures as such changes, modifications or improvements to the CINNAHOLIC® System may require.
Specifically, the franchisee must make reasonable alterations to the Bakery or premises as necessary to conform to Cinnaholic's current marketing and operating standards and specifications. The franchisee is also responsible for painting the Bakery's interior or exterior at intervals determined by Cinnaholic, but no more than once per calendar year, using paints that meet Cinnaholic's specifications. The franchisee must also use printed paper containers, boxes, wrappers, trays, soft drink cups, and carry-out bags that conform to Cinnaholic's standards.
Additionally, the franchisee must refurbish the premises of the Bakery at its expense, to conform to the Bakery, trade dress, color schemes and presentation of the Marks in a manner consistent with the then-current image for new Bakeries. This refurbishment is required at Cinnaholic's request, but not more often than once every 5 years, unless sooner required by the franchisee's lease. Refurbishments may include structural changes, installation of new equipment and signs, remodeling, redecoration and modifications to existing improvements. Cinnaholic may impose fines of $100 to $1000 per violation per day for failure to comply with the Operations Manual.