What is Cinnaholic's policy on reducing the Development Fee for prospective franchisees?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
e first Bakery franchised by you.
As discussed in Item 1 of this Disclosure Document, you must enter into a Development Agreement where you will commit to develop an agreed number of CINNAHOLIC® Bakeries consistent with the Development Schedule. When you sign the Development Agreement, you must pay us an upfront initial franchise fee of $40,000 for each Bakery that you agree to develop under the Development Agreement (the "Development Fee"), with the minimum number of bakeries being one. The Development Fee is payable in one lump sum when you sign the Development Agreement. If a Bakery is developed in accordance with the Development Schedule, the Development Fee attributable to that Bakery will be credited towards the payment of the initial franchise fee due under the Franchise Agreement. If a Bakery is not established in accordance with the Development Schedule, the Development Fee that would have otherwise been credited towards payment of the initial franchise fee for that Bakery will be forfeited and retained by us. If you and we are unable to agree upon a site for a Bakery and, as a result, you fail to meet your Development Schedule, we may terminate your Development Agreement. If, for any reason, the Development Agreement terminates before all or a portion of the Development Fee has been applied to the initial franchise fees, we will retain the unapplied portion of the Development Fee to compensate us for our time, effort and lost opportunities. The Development Fee is uniform for all franchisees purchasing through this Disclosure Document. We have no intention, now or in the future, of reducing the Development Fee for any prospective Franchisee, although we reserve the right to do so in our sole discretion on a case-by-case basis. The Development Fee is not refundable under any circumstance.
Other Initial Fees. Generally, there are no additional initial fees. Under the Franchise Agreement, we will provide you with assistance in opening the Bakery and training your employees. Although we do not intend to charge you for this assistance, we reserve the right to charge you for extraordinary travel and living expenses incurred by our employees in providing this assistance. In the event you request additional opening assistance, which we envision will only occur in unique circumstances, and we agree to provide you with the extra assistance, you must reimburse us for all costs and expenses we incur in connection with providing you this additional assistance, including, wages, overhead and travel and living expenses of our employees providing the assistance and we have the right to charge our daily fee for additional assistance (see Item 6). It is not possible to estimate a range of these additional costs and expenses because they will vary depending upon a number of factors like the franchisee, the amount of extra assistance requested and the location of the franchise. In addition, if at the time you sign your Franchise Agreement you have selected and we approve a location for your Bakery, you will pay us a Project Manager/Coordinator Fee in the amount of $1,795, for which we monitor your Bakery's project progress, identify potential bottlenecks, help you expedite preconstruction activities with the goal of expediting your Bakery opening.
Source: Item 5 — INITIAL FEES (FDD pages 11–12)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the Development Fee is $40,000 for each bakery a franchisee commits to develop under a Development Agreement. This fee is payable in a lump sum when the agreement is signed. While Cinnaholic states that the Development Fee is uniform and they have no current intention of reducing it, they reserve the right to do so on a case-by-case basis at their sole discretion. The Development Fee is non-refundable under any circumstances.
In 2024, Cinnaholic did offer initial franchise fee discounts to some franchisees. One franchisee received a $5,000 discount for a two-store purchase ($2,500 per store), another received a $5,000 discount, and a third received a $1,000 discount. Cinnaholic's current policy includes potential discounts for franchisees purchasing three or more units and a 10% discount for veterans on their first bakery franchise.
It is important to note the distinction between the Development Fee and the initial franchise fee. The Development Fee is associated with the Development Agreement, while the initial franchise fee is paid for each franchised bakery. Although Cinnaholic states the Development Fee is generally uniform, they have demonstrated a willingness to offer discounts on the initial franchise fee under certain conditions. A prospective franchisee should inquire about the possibility of negotiating a reduced initial franchise fee, especially if planning to open multiple locations or if they qualify for the veteran discount.