Under what conditions can a Cinnaholic franchisee terminate the Development Agreement?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary | |
|---|---|---|---|
| d. | Termination by franchisee | Section 21.1 | You can terminate only if we fail to cure a default under the Franchise Agreement within 90 days (or 150 days in some instances) after you give us written notice of termination. |
| e. | Termination by franchisor without cause | Not Applicable | Not Applicable. Termination of the Development Agreement does not allow for the termination of any then in force Franchise Agreement. Termination of any Franchise Agreement does not allow for termination of the Development Agreement, so long as Franchisee is otherwise in compliance with its development schedule. |
| f. | Termination by franchisor with cause | Sections 21.2 and 21.3 | We can terminate only if you default or if certain events (described in (g) and (h) below) occur. In some instances, you will have an opportunity to cure the default. Termination of the Development Agreement does not allow for the termination of any then in force Franchise Agreement. Termination of any Franchise Agreement does not allow for termination of the Development Agreement, so long as Franchisee is otherwise in compliance with its development schedule. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 42–50)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, a franchisee's ability to terminate the Franchise Agreement is limited. The franchisee can only terminate the agreement if Cinnaholic fails to correct a default under the Franchise Agreement within 90 days, although this period extends to 150 days in certain situations, after the franchisee provides written notice of termination.
This is a stricter condition compared to what is typically seen in the franchise industry, where franchisees may have broader termination rights under certain circumstances. The limited termination rights mean that a Cinnaholic franchisee has little recourse if they want to exit the agreement early, even if Cinnaholic is underperforming or not meeting its obligations.
Prospective Cinnaholic franchisees should be aware of this limitation and carefully consider their ability to fulfill the terms of the Franchise Agreement. They should also evaluate Cinnaholic's performance and reputation to assess the likelihood of Cinnaholic defaulting on its obligations. It is important to note that the termination of the Development Agreement does not allow for the termination of any then in force Franchise Agreement, and vice versa, as long as the franchisee is otherwise in compliance with its development schedule.