Under what conditions can the Cinnaholic agreement be terminated earlier than the expiration date?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
- 12.1.
Termination by Developer.
Developer may terminate this Agreement if Developer is in substantial compliance with this Agreement and Franchisor materially breaches this Agreement and fails to cure such material breach within 90 days after written notice thereof is delivered to Franchisor.
Notwithstanding the foregoing, if the breach is curable but is of a nature which cannot reasonably be cured within such 90 day period and Franchisor has commenced and is continuing to make good faith efforts to cure such breach, Franchisor shall be given an additional 60 day period to cure the same, and this Agreement shall not terminate.
In the event of termination by Developer, all post-termination obligations of Developer described herein shall not be waived but shall be strictly adhered to by Developer.
- 12.2.
Termination by Franchisor without a Cure Period.
Franchisor may immediately terminate this Agreement upon written notice to Developer, without opportunity to cure, if:
(i) Developer files a petition under any bankruptcy or reorganization law, becomes insolvent, or has a trustee or receiver appointed by a court of competent jurisdiction for all or any part of its property;
(ii) Developer seeks to effect a plan of liquidation, reorganization, composition or arrangement of its affairs, whether or not the same shall be subsequently approved by a court of competent jurisdiction; it being understood that in no event shall this Agreement or any right or interest hereunder be deemed an asset in any insolvency, receivership, bankruptcy, composition, liquidation, arrangement or reorganization proceeding;
Source: Item 23 — RECEIPT (FDD pages 62–269)
What This Means (2025 FDD)
According to the 2025 Cinnaholic Franchise Disclosure Document, the agreement can be terminated earlier than its natural expiration date under certain conditions, both by the franchisee and by Cinnaholic. A franchisee can terminate the agreement if they are in substantial compliance with the agreement and Cinnaholic materially breaches the agreement, and fails to correct the breach within 90 days after receiving written notice. If the breach is curable but cannot reasonably be cured within 90 days, Cinnaholic is granted an additional 60 days to cure the breach, provided they have commenced and are continuing good faith efforts to cure it.
Cinnaholic can terminate the agreement immediately, without allowing an opportunity to cure the breach, if the franchisee files for bankruptcy or reorganization, becomes insolvent, or has a trustee or receiver appointed for their property. Similarly, Cinnaholic can terminate the agreement if the franchisee seeks to implement a plan for liquidation, reorganization, composition, or arrangement of its affairs, regardless of whether it's approved by a court.
These termination conditions are typical in franchise agreements, providing a balance between protecting the franchisee's investment and ensuring Cinnaholic can maintain brand standards and protect its system. It is important for a prospective franchisee to understand these conditions, as early termination can have significant financial and legal consequences.