When must the Initial Franchise Fees be paid to Cinnaholic in full by the franchisee in Minnesota?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
Based on our initial financial statements, the Commissioner of Commerce for the State of Minnesota requires that payment of all Initial Franchise Fees be deferred until such time as all initial obligations which we owe to you under the Franchise Agreement and any other agreement have been fulfilled by us and you have commenced doing business pursuant to the Franchise Agreement.
Therefore, Initial Franchise Fees must be paid to us in full by you immediately upon the commencement of your CINNAHOLIC® business.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 42–50)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, a specific addendum addresses franchise sales in Minnesota. Due to the initial financial statements of Cinnaholic, the Commissioner of Commerce for the State of Minnesota mandates a deferral of the initial franchise fees.
This means that a Cinnaholic franchisee in Minnesota is not required to pay the initial franchise fees until Cinnaholic has fulfilled all of its initial obligations under the Franchise Agreement and any other related agreements. Furthermore, the franchisee must have commenced business operations before the initial franchise fees become due.
In practical terms, this deferral provides a significant benefit to the franchisee, as it reduces the upfront financial burden. The franchisee can focus on setting up the business and commencing operations without the immediate pressure of paying the initial franchise fee. The initial franchise fees must be paid to Cinnaholic immediately upon the commencement of the Cinnaholic business.