In Michigan, what constitutes 'good cause' for Cinnaholic to terminate a franchise agreement?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
THE STATE OF MICHIGAN PROHIBITS CERTAIN UNFAIR PROVISIONS THAT ARE SOMETIMES IN FRANCHISE DOCUMENTS. IF ANY OF THE FOLLOWING PROVISIONS ARE IN THESE FRANCHISE DOCUMENTS, THE PROVISIONS ARE VOID AND CANNOT BE ENFORCED AGAINST YOU:
(A) A PROHIBITION ON THE RIGHT OF A FRANCHISEE TO JOIN AN ASSOCIATION OF FRANCHISEES.
(B) A REQUIREMENT THAT A FRANCHISEE ASSENT TO A RELEASE, ASSIGNMENT, NOVATION, WAIVER, OR ESTOPPEL WHICH DEPRIVES A FRANCHISEE OF RIGHTS AND PROTECTIONS PROVIDED IN THIS ACT.
THIS SHALL NOT PRECLUDE A FRANCHISEE, AFTER ENTERING INTO A FRANCHISE AGREEMENT, FROM SETTLING ANY AND ALL CLAIMS.
- (C) A PROVISION THAT PERMITS A FRANCHISOR TO TERMINATE A FRANCHISE BEFORE THE EXPIRATION OF ITS TERM EXCEPT FOR GOOD CAUSE.
GOOD CAUSE SHALL INCLUDE THE FAILURE OF THE FRANCHISEE TO COMPLY WITH ANY LAWFUL PROVISIONS OF THE FRANCHISE AGREEMENT AND TO CURE SUCH FAILURE AFTER BEING GIVEN WRITTEN NOTICE THEREOF AND A REASONABLE OPPORTUNITY, WHICH IN NO EVENT NEED BE MORE THAN 30 DAYS, TO CURE SUCH FAILURE.
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, Michigan law impacts franchise agreement terminations. Specifically, a provision that allows Cinnaholic to terminate a franchise before its term expires is only enforceable if there is 'good cause'.
'Good cause' in Michigan is defined as the franchisee's failure to comply with any lawful provision within the Cinnaholic Franchise Agreement. However, Cinnaholic must provide the franchisee with written notice of the failure and a reasonable opportunity to correct it. The document specifies that this cure period does not need to exceed 30 days.
This stipulation protects Cinnaholic franchisees in Michigan from arbitrary or unfair terminations. It ensures they have a chance to rectify any issues before Cinnaholic can terminate the agreement, providing a degree of security and recourse. Prospective franchisees should carefully review the franchise agreement to understand all the provisions and their obligations to avoid potential 'good cause' terminations.