Does Cinnaholic provide material benefits to franchisees, such as franchise renewal, based on their use of designated suppliers?

According to Cinnaholic's 2025 Franchise Disclosure Document, Cinnaholic does not provide material benefits to franchisees, such as franchise renewal or the granting of additional franchises, based on their use of designated or approved suppliers. However, Cinnaholic and its affiliates have the right to receive payments or other benefits like rebates, discounts, and allowances from authorized suppliers based upon their dealings with franchisees. Cinnaholic may use these monies without restriction for any purpose they deem appropriate or necessary.

For the fiscal year ended December 31, 2024, Cinnaholic received $3,735 in rebates from Fun Express, $22,000 in rebates from Ventura Foods, and $6,523 in rebates from Saebert. These rebates and fees are often based on the volume of products purchased from these suppliers by the Cinnaholic franchise system. Cinnaholic may also receive fees from a supplier as a condition of their approval of that supplier.

While Cinnaholic may negotiate purchase arrangements, including price terms, with designated and approved suppliers on behalf of the System, these arrangements do not translate into material benefits for franchisees in the form of franchise renewal or additional franchise grants. This is a fairly standard practice in franchising, where franchisors often receive benefits from suppliers based on system-wide purchases, but these benefits are not directly tied to individual franchisee performance or incentives like franchise renewal.