Is the renewal of the Cinnaholic franchise dependent on executing the then-current form of the Franchise Agreement?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
(iii) Franchisee shall execute, at Franchisor's option, Franchisor's then-current form of Franchise Agreement, which Franchise Agreement shall supersede in all respects the terms and conditions of this Agreement and may contain terms and conditions substantially different from those set forth herein, including, without limitation, an increase in Royalty Fees or Advertising Fees (as such terms are hereinafter defined); provided, however, the renewal Franchise Agreement shall not provide for any additional renewal rights;
(iv) Franchisee shall pay a renewal fee equal to one-half of the then-current Franchise Fee (as such term is hereinafter defined) charged by Franchisor;
(v) Franchisee shall complete, at its own expense and to Franchisor's satisfaction, all maintenance, refurnishing, renovation, modernizing and remodeling of the Bakery as Franchisor shall reasonably require so as to reflect the current image and standards of CINNAHOLIC® Bakeries;
(vi) Franchisee shall be current in the payment of all obligations to Franchisor and to any of its affiliates and subsidiaries as well as lessors, vendors and suppliers of the Bakery;
(vii) Before renewal, Franchisee and/or Franchisee's supervisory and operational manager(s) shall at Franchisee's expense, attend and successfully complete to Franchisor's reasonable satisfaction any retraining program Franchisor may require;
(viii) Franchisee and its owners execute a general release, in a form satisfactory to Franchisor, of any and all claims it may have against Franchisor, including any affiliates or subsidiaries, and its and their officers, directors, shareholders, managers, members, partners, employees and agents; and
(ix) Franchisee provides Franchisor with evidence that Franchisee has the right to remain in possession of the Franchised Site or to secure and develop a suitable alternative site acceptable to Franchisee for the renewal term.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, to renew the franchise for an additional 10-year term, a franchisee must meet several conditions, including executing the then-current form of the Franchise Agreement, if Cinnaholic chooses. This new agreement supersedes the original and may contain substantially different terms and conditions, potentially including increased Royalty Fees or Advertising Fees. However, the renewal Franchise Agreement will not provide any additional renewal rights.
In addition to signing the new agreement, the franchisee must provide written notice of their intent to renew at least six months before the initial term expires and must not be in default of any agreements with Cinnaholic, its affiliates, or any creditors or suppliers. The franchisee must also have fully performed all obligations under the existing agreements.
Furthermore, the franchisee is responsible for all maintenance, refurnishing, renovation, modernizing, and remodeling of the bakery to meet Cinnaholic's current image and standards, at the franchisee's own expense. The franchisee must also be current on all payments to Cinnaholic and its affiliates, as well as to lessors, vendors, and suppliers. The franchisee and/or their supervisory and operational managers must also attend and successfully complete any retraining program that Cinnaholic requires, at the franchisee's expense. Finally, the franchisee and its owners must execute a general release of any claims against Cinnaholic, and the franchisee must provide evidence that they have the right to remain in possession of the franchised site or secure an alternative site acceptable to Cinnaholic for the renewal term.
In summary, the renewal process involves significant obligations for the franchisee, including potential financial investments in remodeling and retraining, adherence to updated brand standards, and acceptance of potentially altered financial terms in the new Franchise Agreement. A prospective franchisee should carefully consider these factors and the potential for increased fees and operational requirements when evaluating the long-term viability of a Cinnaholic franchise.