What is the maximum amount that Cinnaholic can charge for the evaluation, testing, and inspection of a proposed supplier?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
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• POS System: Square POS System - $179/month
Request for Supplier Approval. If (i) you wish to purchase any item from a supplier (manufacturer or distributor and service providers, such as food delivery services or applications) we have not previously approved or an item that does not comply with our standards and specifications and (ii) the item has not been designated by us to be exclusively supplied by a designated supplier(s), you must first submit to us a written request for approval. We will establish a procedure for submitting these requests. We will require the proposed supplier to provide us with certain financial and operational information and other information regarding the supplier and the items to be approved. In addition, the proposed supplier must permit our representatives to inspect its facilities (e.g. business offices and/or manufacturing facilities, as applicable). Before we approve a supplier, we will evaluate the economic terms of a possible relationship and ensure that the proposed supplier meets our requirements. We reserve the right, at our option, and at the proposed supplier's expense, to inspect or re-inspect the facilities, equipment, and raw materials of any supplier, at any time. The proposed supplier or you must pay, in advance, a fee not to exceed the reasonable cost of any evaluation, testing, and inspections we undertake. Within a reasonable time frame after we receive the completed request and after we complete any evaluation and inspection or testing, (approximately 45 days), we will notify you in writing of our approval or disapproval of the proposed supplier or item. Generally, we will respond to your requests for supplier approval within a reasonable time period not to exceed 90 days. We are not required to approve any supplier or item not meeting our standards and specifications. We may deny approval for any reason, including our determination to limit the number of approved suppliers. You must not use, offer for sale or sell any of the proposed supplier's products or any other product that does not meet our standards or specifications until you receive
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 21–25)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, if a franchisee wants to use a supplier that Cinnaholic has not previously approved, the franchisee must submit a written request for approval. Cinnaholic will then require the proposed supplier to provide financial and operational information and may inspect the supplier's facilities. The franchisee or the proposed supplier must pay in advance a fee not to exceed the reasonable cost of any evaluation, testing, and inspections Cinnaholic undertakes.
After Cinnaholic receives the completed request and completes any evaluation, inspection, or testing, they will notify the franchisee in writing of their approval or disapproval of the proposed supplier or item within approximately 45 days, but generally no more than 90 days. Cinnaholic is not required to approve any supplier or item that does not meet their standards and specifications and may deny approval for any reason, including limiting the number of approved suppliers.
This means that a prospective Cinnaholic franchisee could incur costs for supplier evaluations if they wish to use a supplier not already approved by Cinnaholic. The fee is capped at the reasonable cost of the evaluation, testing, and inspections, but the exact amount could vary depending on the complexity and extent of the evaluation required. This policy allows Cinnaholic to maintain quality control and uniformity across its franchise system, but it also gives them the ability to limit a franchisee's choice of suppliers.