In Michigan, what happens if any of the prohibited provisions are found in the Cinnaholic franchise documents?
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.
- (D) A PROVISION THAT PERMITS A FRANCHISOR TO REFUSE TO RENEW A FRANCHISE WITHOUT FAIRLY COMPENSATING THE FRANCHISEE BY REPURCHASE OR OTHER MEANS FOR THE FAIR MARKET VALUE, AT THE TIME OF EXPIRATION, OF THE FRANCHISEE'S INVENTORY, SUPPLIES, EQUIPMENT, FIXTURES, AND FURNISHINGS.
PERSONALIZED MATERIALS WHICH HAVE NO VALUE TO THE FRANCHISOR AND INVENTORY, SUPPLIES, EQUIPMENT, FIXTURES, AND FURNISHINGS NOT REASONABLY REQUIRED IN THE CONDUCT OF THE FRANCHISED BUSINESS ARE NOT SUBJECT TO COMPENSATION.
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, the state of Michigan prohibits certain unfair provisions that are sometimes included in franchise documents. If any of these prohibited provisions are present in Cinnaholic's franchise documents, specifically the Development Agreement, Franchise Agreement, and/or Franchisee Disclosure Questionnaire, they are considered void and unenforceable against the franchisee.
The specific provisions that Michigan law prohibits include restrictions on a franchisee's right to join an association of franchisees, requirements for a franchisee to waive rights or protections under the Michigan Franchise Investment Law, clauses allowing Cinnaholic to terminate a franchise without good cause, and provisions allowing Cinnaholic to refuse franchise renewal without fairly compensating the franchisee for the fair market value of their inventory, supplies, equipment, fixtures, and furnishings. However, franchisees can settle claims after entering into the franchise agreement.
This protection ensures that Cinnaholic franchisees in Michigan are not subjected to unfair or overbearing terms in their franchise agreements. It provides a safeguard against provisions that could potentially deprive franchisees of their rights and protections under Michigan law. Prospective franchisees should carefully review the franchise documents to ensure compliance with these Michigan-specific regulations and consult with legal counsel if they have any concerns.