When must the Initial Franchise Fees be paid to Cinnaholic in Minnesota after the deferral period?
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 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 27–35)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, Minnesota franchisees benefit from a mandated deferral of the initial franchise fee. The Commissioner of Commerce for the State of Minnesota requires this deferral based on Cinnaholic's initial financial statements. This means that a new Cinnaholic franchisee in Minnesota does not have to pay the initial franchise fee upfront.
The deferral lasts until Cinnaholic has fulfilled all of its initial obligations to the franchisee as outlined in the Franchise Agreement and any other related agreements. Furthermore, the franchisee must have commenced business operations. This protection ensures that Cinnaholic fulfills its promises of providing support and resources before receiving the initial franchise fee.
Once the franchisee has commenced their Cinnaholic business, the initial franchise fees become due immediately. This means that as soon as the Cinnaholic location opens its doors and begins serving customers, the franchisee is obligated to pay the initial franchise fee in full. This arrangement is designed to align the payment of the fee with the franchisee's ability to generate revenue.