What sections of the Cinnaholic Franchise Agreement outline the franchisee's obligation to pay fees?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
4. INITIAL FRANCHISE FEE
Upon the execution of this Agreement, Franchisee shall pay to Franchisor an Initial Franchise Fee in an amount set forth on Exhibit A (the "Franchise Fee"). In the event the Development Agreement requires the payment of a development fee by Franchisee to Franchisor, there shall be credited toward the payment of the Franchise Fee all or a portion of those development fees in the manner and to the extent provided for in the Development Agreement. Franchisee acknowledges and agrees that the Franchise Fee is paid as consideration for Franchisor granting Franchisee the right to develop, open and operate the Bakery using the Marks and the CINNAHOLIC® System and that the Franchise Fee is fully earned by Franchisor at the time this Agreement is executed, and the Franchise Fee shall not be refundable for any reason.
5. ROYALTY FEE; METHOD OF PAYMENT; LATE PAYMENT
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 26–27)
What This Means (2025 FDD)
According to the 2025 Cinnaholic Franchise Disclosure Document, the franchisee's obligation to pay fees is outlined in multiple sections of the Franchise Agreement. Section 4 discusses the initial franchise fee, stating that upon execution of the agreement, the franchisee must pay Cinnaholic the initial franchise fee, the amount of which is set forth on Exhibit A. The agreement specifies that this fee is consideration for granting the franchisee the right to develop and operate the bakery using Cinnaholic's marks and system. It also clarifies that the franchise fee is fully earned by Cinnaholic upon execution of the agreement and is non-refundable.
Section 5 pertains to the royalty fee, method of payment, and late payment terms. Additionally, if a franchisee seeks to renew their franchise agreement, Section 2(iv) states that they must pay a renewal fee equal to one-half of the then-current franchise fee charged by Cinnaholic.
Furthermore, after signing a lease for the franchised site, franchisees will pay Cinnaholic a Project Management Fee, currently $1,795, for assistance in developing the bakery site. These sections collectively define the various fees a Cinnaholic franchisee is obligated to pay, covering initial costs, ongoing royalties, and renewal fees.