factual

Are the provisions regarding the franchise relationship for Cinnaholic contained within the agreements attached to the Disclosure Document?

Cinnaholic Franchise · 2025 FDD

Answer from 2025 FDD Document

| | | | of | | | | | months | | | | | remaining | | | | | in | | | | | the | | | | | then | | | | | current | | | | | term | | | | | of | | | | | the | | | | | Franchise | | | | | Agreement, | | | | | whichever is less. | | | | Applicable state law may require additional disclosures related to the information in this Disclosure Document. These additional disclosures appear in Exhibit E attached to this Disclosure Document.

Exhibit F

State Specific Addenda

(See Attached)

CINNAHOLIC FRANCHISING, LLC ADDENDUM TO MARKET DEVELOPMENT AGREEMENT (California)

The following Addendum modifies and supersedes the Cinnaholic Franchising, LLC Market Development Agreement (the "Agreement") with respect to CINNAHOLIC franchises offered or sold to either a resident of the State of California or a non-resident who will be operating a CINNAHOLIC franchise in the State of California pursuant to the California Franchise Investment Law §§ 31000 through 31516, and the California Franchise Relations Act, California Business and Professions Code §§ 20000 through 20043, as follows:

  1. The first sentence of Section 4 of the Agreement is deleted in its entirety and replaced with the following:

The Department has determined that we, the franchisor, have not demonstrated that we are adequately capitalized and/or that we must rely on franchise fees to fund out operations. The Commissioner has imposed a fee deferral condition, which requires that we defer the collection of all initial fees from California franchisees until we have completed all of our pre-opening obligations and you are open for business. Initial fees attributable to a specific unit should be deferred until that specific unit is open; that is, the entire payment of the entire initial fee for multiple units will not be due 5 days after signing the Market Development Agreement.

    1. If any of the provisions of the Agreement concerning termination are inconsistent with either the California Franchise Relations Act or with the federal bankruptcy law (11 U.S.C. §101, et seq.) (concerning termination of the Agreement on certain bankruptcy-related events), then such laws will apply.
    1. The Agreement requires that it be governed by Georgia law. This requirement may be unenforceable under California law.
    1. Developer must sign a general release if Developer transfers its franchise. California Corporations Code 31512 voids a waiver of Developer's rights under the Franchise Investment Law (California Corporations Code 31000 through 31516). Business and Professions Code 20010 voids a waiver of Developer's rights under the Franchise Relations Act (Business and Professions Code 20000 through 20043).
    1. The Agreement contains a covenant not to compete, as well as a no-poach/non-solicitation covenant, which extend beyond the termination of the Agreement. These provisions may not be enforceable under California law.

6. Section 31512.1- Franchise Agreement Provisions Void as Contrary to Public Policy:

Any provision of a franchise agreement, franchise disclosure document, acknowledgement, questionnaire, or other writing, including any exhibit thereto, disclaiming or denying any of the following shall be deemed contrary to public policy and shall be void and unenforceable:

  • (a) Representations made by the franchisor or its personnel or agents to a prospective franchisee.
  • (b) Reliance by a franchisee on any representations made by the franchisor or its personnel or agents.
  • (c) Reliance by a franchisee on the franchise disclosure document, including any exhibit thereto.
  • (d) Violations of any provision of this division.
    7. No statement, questionnaire, or acknowledgment any applicable state franchise law, including fraud statement made by any franchisor, NASAA STATEMENT OF POLICY REGARDING AND ACKNOWLEDGMENTS. questionnaires.pdf signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under in the inducement, or (ii) disclaiming reliance on any franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise. See THE USE OF FRANCHISE QUESTIONNAIRES https://www.nasaa.org/wp-content/uploads/2022/11/sop-franchise
    8. To the extent this Addendum is inconsistent with any terms or conditions of the Agreement or the
    Exhibits or Schedules thereto, the terms of this Addendum shall govern.
    , 20 Each of the undersigned hereby acknowledges having read, understood, and executed this Addendum on
    FRANCHISOR: DEVELOPER:
    CINNAHOLIC FRANCHISING, LLC If an Individual:
    By: Signature:
    Print Name: Print Name:
    Title: If other than an Individual:
    By: Name: Title: # CINNAHOLIC FRANCHISING, LLC ADDENDUM TO MARKET DEVELOPMENT AGREEMENT

(Illinois)

The following Addendum modifies and supersedes the Cinnaholic Franchising, LLC Market Development Agreement (the "Agreement") with respect to CINNAHOLIC franchises offered or sold to either a resident of the State of Illinois or a non-resident who will be operating a CINNAHOLIC franchise in the State of Illinois pursuant to the Illinois Franchise Disclosure Act of 1987, Ill. Comp. Stat. §§ 705/1 through 705/44, as follows:

    1. Illinois law governs the Franchise Agreement(s).
    1. Payment of Initial Franchise/Development Fees will be deferred until Franchisor has met its initial obligations to franchisee, and franchisee has commenced doing business. This financial assurance requirement was imposed by the Office of the Illinois Attorney General due to Franchisor's financial condition.
    1. In conformance with Section 4 of the Illinois Franchise Disclosure Act, any provision in a franchise agreement that designates jurisdiction and venue in a forum outside of the State of Illinois is void. However a franchise agreement may provide for arbitration to take place outside of Illinois.
    1. Your rights upon Termination and Non-Renewal are set forth in sections 19 and 20 of the Illinois Franchise Disclosure Act.
    1. In conformance with section 41 of the Illinois Franchise Disclosure Act, any condition, stipulation or provision purporting to bind any person acquiring any franchise to waive compliance with the Illinois Franchise Disclosure Act or any other law of Illinois is void.
    1. No statement, questionnaire or acknowledgement signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of: (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on behalf of the Franchisor. This provision supersedes any other term of any document executed in connection with the franchise.

Each of the undersigned hereby acknowledges having read, understood, and executed this Addendum on _______________________, 20____. FRANCHISOR: DEVELOPER: CINNAHOLIC FRANCHISING, LLC If an Individual: By:________________________________ Print Name:_________________________ Signature: ________________________________ Title:______________________________ Print Name: _______________________________ If other than an Individual: _________________________________________ By:______________________________________ Name:____________________________________

CINNAHOLIC FRANCHISING, LLC ADDENDUM TO MARKET DEVELOPMENT AGREEMENT (Maryland)

The following Addendum modifies and supersedes the Cinnaholic Franchising, LLC Market Development Agreement (the "Agreement") with respect to CINNAHOLIC franchises offered or sold to either a resident of the State of Maryland or a non-resident who will be operating a CINNAHOLIC franchise in the State of Maryland pursuant to the Maryland Franchise Registration and Disclosure Law, Md. Code Bus. Reg. §§ 14-201 through 14-233, as follows:

  1. The first sentence of Section 4 of the Agreement is deleted in its entirety and replaced with the following:

Based upon the franchisor's financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred until the franchisor completes its pre-opening obligations under the franchise agreement. In addition, all development fees and initial payments by area developers shall be deferred until the first franchise under the development agreement opens.

    1. The general release language required as a condition of sale and/or assignment or transfer shall apply except for claims arising under the Maryland Franchise Registration and Disclosure Law.
    1. Under certain circumstances, the Agreement requires Developer to submit to a court proceeding in the State where Franchisor's principal executive office is located. These provisions may run contrary to the Maryland Franchise Registration and Disclosure Law. Therefore, nothing will preclude Developer from being able to enter into litigation with Franchisor in Maryland.
    1. Any claims arising under the Maryland Franchisor Registration and Disclosure Law must be brought within three years after the grant of the franchise.
    1. Attached to this Addendum as Schedule 1 is the form of the general release that Developer and its owners will sign, as, and if, required by Section 13.4 of the Agreement.
    1. No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
    1. Each provision of this Addendum will be effective only to the extent, with respect to such provision, that the jurisdictional requirements of the Maryland Franchise Registration and Disclosure Law are met independently without reference to this Addendum.
    1. To the extent this Addendum is inconsistent with any terms or conditions of the Agreement or the Exhibits or Schedules thereto, the terms of this Addendum shall govern.
Each of the undersigned hereby acknowledges having read, understood, and executed this Addendum on
, 20
FRANCHISOR: DEVELOPER:
CINNAHOLIC FRANCHISING, LLC If an Individual:
By: Print Name: Title: Signature: Print Name: If other than an Individual:
By: Name: Title: Schedule 1 General Release

(See Attached)

GENERAL RELEASE

| This General Release is made effective this day of, 20 In consideration for the grant by Cinnaholic Franchising, LLC, a Georgia limited liability company ("CINNAHOLIC"), to the undersigned of certain rights in connection with transfer or renewal thereof, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the undersigned, individually and collectively, hereby unconditionally release, discharge, and acquit CINNAHOLIC, its past and present subsidiaries and affiliates, and its and their shareholders, owners, directors, officers, managers, members, partners, employees, agents, representatives, successors and assigns, from any and all liabilities, damages, claims, demands, costs, expenses, debts, indemnities, suits, disputes, controversies, actions and causes of action of any kind whatsoever, whether known or unknown, fixed or contingent, regarding or arising out of any prior or existing franchise relationship, development agreement, franchise agreement or any other agreement executed by any of the any CINNAHOLIC Bakery (whether currently or of them), or any other prior or existing business relationship between any of the undersigned and CINNAHOLIC (or any subsidiary or affiliate individually or collectively has asserted, may have (or any of the specifically, without limitation, claims arising from contract, written or oral communications, alleged misrepresentations, and acts of negligence, whether active or passive. This General Release shall survive the assignment or termination of any of the franchise agreements or other documents entered into by and between CINNAHOLIC and any of the undersigned. This General Release is not intended as a waiver of those rights of the undersigned which cannot be waived under applicable state franchise laws nor is it intended to relieve CINNAHOLIC or any other person, Maryland Franchise Registration and Disclosure Law. This General Release shall be governed by and construed in accordance with the laws of the State of Georgia without regard to its conflicts of law provisions.

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 42–50)

What This Means (2025 FDD)

According to the 2025 Cinnaholic Franchise Disclosure Document, the franchise relationship is governed by several agreements and addenda. For California franchisees, an addendum modifies and supersedes the standard Market Development Agreement, addressing specific requirements under California franchise law. This addendum includes stipulations regarding the deferral of initial fees until pre-opening obligations are met and the franchise is open for business, indicating a tailored approach to comply with state regulations.

Additionally, the FDD includes a General Release form that franchisees may be required to sign in connection with a transfer or renewal. This release covers a broad range of potential claims against Cinnaholic, its affiliates, and related parties, arising from the franchise relationship or any prior business dealings. However, the release explicitly states that it does not waive rights that cannot be waived under applicable state franchise laws, nor does it relieve Cinnaholic from liability imposed by the Maryland Franchise Registration and Disclosure Law.

Prospective franchisees should carefully review all attached agreements and addenda, paying close attention to any state-specific modifications that may apply to their situation. Understanding the terms of the Market Development Agreement, the implications of the General Release, and any other relevant documents is crucial for making an informed decision about investing in a Cinnaholic franchise. Franchisees should consult with a legal professional to fully understand their rights and obligations under these agreements.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.