Under what conditions can a Cinnaholic franchisee terminate the Franchise Agreement?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary | |
|---|---|---|---|
| a. | Length of the franchise term | Section 2.1 | 10 years |
| b. | Renewal or extension of the term | Section 2.2 | If you meet the requirements, you can renew for one additional consecutive 10 year term; after that you will have no right to renew the Franchise Agreement. |
| c. | Requirements for franchisee to renew or extend | Section 2.2 | You must: provide written notice of election to renew; not be in default of the Franchise Agreement or any other agreement relating to the Bakery; sign the then-current form of Franchise Agreement; pay a renewal fee; refurbish the Bakery, if required; complete any required retraining program; sign the current form of general release in Exhibit J to this Disclosure Document; and maintain ownership or leasehold interest in the Bakery location or secure a suitable alternative. Terms of the then-current form of Franchise Agreement may differ materially from any and all of those contained in the Franchise Agreement attached to this Disclosure Document. |
| 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. |
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 can terminate the Franchise Agreement, but only under specific conditions. The franchisee can only terminate if Cinnaholic fails to correct a default under the Franchise Agreement within 90 days, although in some instances, this cure period may extend to 150 days, after the franchisee provides written notice of termination.
This termination condition is notably restrictive. Unlike some franchise systems that might allow for termination under a broader range of circumstances, Cinnaholic's agreement limits the franchisee's ability to terminate primarily to situations where Cinnaholic itself is in breach of the agreement and fails to rectify the situation within a specified timeframe. This places a significant burden on the franchisee to continue operating unless Cinnaholic is demonstrably at fault and unresponsive.
Prospective franchisees should carefully consider this limited termination right. It is essential to understand what constitutes a 'default' by Cinnaholic under the Franchise Agreement and the process for providing written notice and allowing the cure period. Franchisees should also evaluate their risk tolerance, considering that they may be bound to the agreement even if they are dissatisfied with the franchise's performance or market conditions, provided Cinnaholic is meeting its obligations. Consulting with a franchise attorney to fully understand the implications of this termination clause is advisable before entering into a Cinnaholic Franchise Agreement.