Under what circumstances would a Cinnaholic developer be required to reimburse the Franchisor for costs and expenses?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
During the term of this Agreement, Franchisor may, in its sole discretion, upon request of Developer, furnish counseling and advisory services to Developer with respect to the development, construction and operation of the CINNAHOLIC® Bakeries to be established hereunder, including consultation and advice regarding the following: (i) parking and building layouts; (ii) traffic planning; (iii) construction and financing of the Bakery and other improvements; (iv) equipment selection and layout; (v) employee selection and training; (vi) advertising and promotion; (vii) bookkeeping and accounting; and (viii) purchasing and inventory control. These counseling and advisory services shall occur at Developer's offices, via telephone or email. Franchisor shall provide such assistance at no expense to Developer; provided, however, Franchisor reserves the right, in its sole discretion, to charge Developer a reasonable fee for unusual, extensive or extraordinary assistance requested by Developer and/or require Developer to reimburse Franchisor for expenses incurred by it in connection with providing such counseling and advisory services. In no event shall Franchisor be liable to Developer in connection with providing or failing to provide such services.
Source: Item 23 — RECEIPT (FDD pages 62–269)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, a developer may be required to reimburse Cinnaholic for expenses incurred if the developer requests unusual, extensive, or extraordinary counseling and advisory services. These services, which Cinnaholic may furnish at its discretion, relate to the development, construction, and operation of Cinnaholic bakeries.
These counseling and advisory services can include consultation and advice on parking and building layouts, traffic planning, construction and financing, equipment selection and layout, employee selection and training, advertising and promotion, bookkeeping and accounting, and purchasing and inventory control. These services are typically provided at the developer's offices or via telephone or email at no expense to the developer.
However, Cinnaholic retains the right to charge a reasonable fee or require reimbursement for expenses if the assistance requested by the developer is deemed unusual, extensive, or extraordinary. This provision allows Cinnaholic to recoup costs associated with providing support beyond the standard level of assistance, protecting their resources while still offering support to developers who may need it.