Which sections of the Cinnaholic Franchise Agreement outline the franchisee's responsibilities for pre-opening purchases and leases?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3.1. Franchised Site. The rights granted to Franchisee hereunder shall be non-exclusive and shall be restricted to the operation of a single CINNAHOLIC® Bakery to be located at the address and location set forth on Exhibit A attached hereto (the "Franchised Site"). During the term of this Agreement, the Franchised Site shall be used exclusively to operate a Bakery. In connection with the execution of any lease or sublease for the Franchised Site, Franchisee must execute, and cause the lessor and/or sublessor of the Franchised Site to execute, the Collateral Assignment of Lease attached to the Market Development Agreement entered into between Franchisor and Franchisee (the "Development Agreement"), in addition to complying with any other obligations and conditions contained in the Development Agreement relating to the lease or sublease of the Franchised Site and the development and construction of the Bakery. The rights granted to Franchisee are for the specific Franchised Site and cannot be transferred to any other location, except with Franchisor's prior written approval. After you sign a lease for the Franchised Site, you will pay us a Project Management Fee, currently $1,795, and we will assist you in developing your Bakery site but monitoring construction and build-out progress, attempting to identify potential bottlenecks, and otherwise help expedite pre-construction activities.
ITEM 11 FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING
Except as listed below, we are not required to provide you with any assistance.
Services Before Opening. Before you open your Bakery, we will:
- (a) Assist you in selecting, and then approve (if appropriate) a lease, sublease or purchase agreement for your Bakery site. We do not choose the site, but may give you support and guidance. (See Development Agreement, Section 7.)
- (b) Provide you with a set of standard architectural plans and specifications for a prototype CINNAHOLIC® Bakery. We must approve any and all changes or revisions to the site and construction plans and specifications. (See Development Agreement, Section 8.)
- (c) License you the Marks necessary to commence the franchised business. (See Franchise Agreement, Section 1.)
- (d) Loan you one copy of the Operations Manual which contain mandatory and suggested specifications, standards, and procedures. The Operations Manual may be provided to you in text and/or electronic format. The Operations Manual is confidential and proprietary and remains our property. We have the right to modify the Operations Manual as we deem appropriate, although the modifications will not alter your status and rights under the Franchise Agreement. Attached to this Disclosure Document as Exhibit D is a copy of the Table of Contents of the Operations Manual. (See Franchise Agreement, Section 7.)
- (e) Provide you with grand opening assistance from our personnel, including planning and developing a grand opening social media marketing and promotional program. (See Franchise Agreement, Sections 11.1 and 13.)
- (f) Give you periodic guidance (as we deem necessary) about the development, opening and operation of the Bakery, including advice regarding equipment selection and layout and employee selection and training. (See Development Agreement, Section 9 and Franchise Agreement, Section 12.)
- (g) Before you commence operating the Bakery, provide initial training for up to two individuals that (i) will assume primary responsibility for managing your Bakery and (ii) will devote full time and best efforts to the management operation of your Bakery (the "Managers"). (See Franchise Agreement, Section 14.1.)
- (h) Provide you written specifications for equipment, signs, fixtures, opening inventory and supplies. We also provide names of approved suppliers for these items. We do not deliver or install the items. (See Franchise Agreement, Section 13.)
- (i) Upon signing your lease, we will provide you with project management to assist you in identifying bottlenecks and helping expedite pre-construction activities to help you have an efficient timeline and a successful Bakery project. (See Franchise Agreement, Section 3.1)
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 26–27)
What This Means (2025 FDD)
According to the 2025 Cinnaholic Franchise Disclosure Document, several sections within the agreement and related documents outline the franchisee's responsibilities regarding pre-opening purchases and leases. Item 11 references multiple sections of the Franchise Agreement and Development Agreement related to pre-opening activities. Specifically, Section 7 of the Development Agreement relates to site selection, while Section 8 concerns architectural plans. Section 1 of the Franchise Agreement covers licensing the marks, Section 7 discusses the Operations Manual, Sections 11.1 and 13 cover grand opening assistance, Section 12 provides guidance on development, and Section 14.1 details initial training. Section 13 also mentions specifications for equipment, signs, fixtures, opening inventory, and supplies. Section 3.1 of the Franchise Agreement discusses project management assistance upon signing the lease.
These sections collectively indicate that Cinnaholic franchisees are responsible for securing a suitable site, adhering to Cinnaholic's architectural plans, purchasing necessary equipment and supplies from approved vendors, and participating in training programs. Cinnaholic provides assistance in site selection, architectural plans, and project management. However, the franchisee is ultimately responsible for the lease and the costs associated with build-out and procurement.
Furthermore, Section 3.1 of the Franchise Agreement states that the franchisee must execute a Collateral Assignment of Lease with the lessor or sublessor, in addition to complying with obligations in the Development Agreement related to the lease, development, and construction of the Bakery. This highlights the legal and contractual obligations a franchisee undertakes when securing a location. After signing a lease, the franchisee will pay Cinnaholic a Project Management Fee, currently $1,795, for assistance in developing the Bakery site.