When must the Initial Franchise Fees be paid to Cinnaholic in Minnesota?

According to Cinnaholic's 2025 Franchise Disclosure Document, the payment of Initial Franchise Fees in Minnesota is subject to specific regulations. The Commissioner of Commerce for the State of Minnesota mandates that the payment of all Initial Franchise Fees be deferred. This deferral lasts until Cinnaholic has fulfilled all its initial obligations to the franchisee under the Franchise Agreement and any other related agreements. Furthermore, the franchisee must have commenced business operations under the Franchise Agreement.

In practical terms, this means a prospective Cinnaholic franchisee in Minnesota will not be required to pay the Initial Franchise Fees upfront. Instead, the fees are only due once Cinnaholic has met its pre-opening obligations, such as providing training, site selection assistance, and other support outlined in the Franchise Agreement. Only after these obligations are met and the franchisee has started operating their Cinnaholic business does the obligation to pay the initial franchise fee arise.

This arrangement offers a significant benefit to the franchisee, as it reduces the initial financial burden and risk. It ensures that Cinnaholic is incentivized to provide the necessary support and fulfill its obligations before receiving the franchise fee. This condition imposed by the Minnesota Commissioner of Commerce provides an added layer of protection for franchisees in the state, aligning their interests more closely with those of Cinnaholic during the critical startup phase. Once the franchisee commences their Cinnaholic business, the Initial Franchise Fees must be paid in full immediately.