What are the requirements for Cinnaholic advertising cooperatives?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
In connection with the Bakery and any and all other CINNAHOLIC® Bakeries owned or operated by Franchisee, Franchisee shall participate, if required by Franchisor, in any local, regional or national cooperative advertising group, consisting of other franchisees of CINNAHOLIC® Bakeries, when and if any such groups are created (each, an "Advertising Cooperative").
The particular Advertising Cooperative(s) in which Franchisee may be required to participate shall be designated by Franchisor in its sole discretion (which designations may be based upon, without limitation, the particular Designated Market Area or the Area of Dominant Influence, as those terms are used in the advertising industry, where the CINNAHOLIC® Bakeries operated by Franchisee are located).
Franchisee's payments to any Advertising Cooperative shall be determined by Franchisee and those other franchisees of the CINNAHOLIC® System and/or Franchisor, as the case may be, who are participants in such Advertising Cooperative, as set forth in the by-laws of that Advertising Cooperative or membership, dues, participation or other payment agreements of such Advertising Cooperative.
Franchisee, however, may not be required to spend more than 2% of Gross Sales per annum in connection with any Advertising Cooperative.
Amounts paid to an Advertising Cooperative shall be credited against payments Franchisee is otherwise required to make for local advertising as required by Section 11.3 above.
Any payments to an Advertising Cooperative shall be in addition to the amounts required to be paid or spent under Sections 11.1 and 11.2 hereof.
Franchisee shall enter into such formal agreements with such other franchisees of the CINNAHOLIC® System and/or Franchisor, as the case may be, as shall be necessary or appropriate to accomplish the foregoing and Franchisee shall abide by such formal agreements and decisions that the Advertising Cooperative is authorized by Franchisor to make related to advertising and marketing in the area covered by the Advertising Cooperative.
If Franchisee becomes delinquent in its dues or other payments to the Advertising Cooperative or fails to abide by any formal agreements or authorized decisions of the Advertising Cooperative, such delinquency or failure shall be deemed a failure to participate in the Advertising Cooperative and a material breach of this Agreement.
Franchisor may upon 30 days' written notice to Franchisee suspend or terminate an Advertising Cooperative's program or operations.
As a member, officer or director of an Advertising Cooperative, at the request of Franchisor, Franchisee shall provide to Franchisor all information requested by Franchisor related to such Advertising Cooperative and Franchisee shall have the obligation to provide such information within 10 days after Franchisor's request to Franchisee.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, franchisees may be required to participate in local, regional, or national advertising cooperatives if designated by Cinnaholic. These cooperatives consist of other Cinnaholic franchisees. The specific advertising cooperative will be determined at Cinnaholic's discretion based on factors like the Designated Market Area or Area of Dominant Influence where the franchisee's bakery is located.
The franchisee's payments to the Advertising Cooperative are determined by the franchisee, other Cinnaholic franchisees, and/or Cinnaholic itself, as outlined in the cooperative's by-laws or membership agreements. However, a franchisee cannot be required to spend more than 2% of gross sales per year on Advertising Cooperative activities. Any amounts paid to an Advertising Cooperative will be credited against the franchisee's local advertising requirements.
Franchisees must enter into formal agreements with other franchisees and/or Cinnaholic to facilitate the advertising cooperative. They must also abide by these agreements and the decisions made by the Advertising Cooperative that Cinnaholic authorizes. Failure to meet these obligations, such as being delinquent in payments or not adhering to agreements, is considered a breach of the franchise agreement. Cinnaholic can suspend or terminate an Advertising Cooperative's program or operations with 30 days' written notice. Franchisees must also provide Cinnaholic with any requested information about the Advertising Cooperative within 10 days of the request.