Under what conditions can Cinnaholic terminate a franchise agreement before its expiration?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
THE STATE OF MICHIGAN PROHIBITS CERTAIN UNFAIR PROVISIONS THAT ARE SOMETIMES IN FRANCHISE DOCUMENTS. IF ANY OF THE FOLLOWING PROVISIONS ARE IN THESE FRANCHISE DOCUMENTS, THE PROVISIONS ARE VOID AND CANNOT BE ENFORCED AGAINST YOU:
(A) A PROHIBITION ON THE RIGHT OF A FRANCHISEE TO JOIN AN ASSOCIATION OF FRANCHISEES.
(B) A REQUIREMENT THAT A FRANCHISEE ASSENT TO A RELEASE, ASSIGNMENT, NOVATION, WAIVER, OR ESTOPPEL WHICH DEPRIVES A FRANCHISEE OF RIGHTS AND PROTECTIONS PROVIDED IN THIS ACT.
THIS SHALL NOT PRECLUDE A FRANCHISEE, AFTER ENTERING INTO A FRANCHISE AGREEMENT, FROM SETTLING ANY AND ALL CLAIMS.
- (C) A PROVISION THAT PERMITS A FRANCHISOR TO TERMINATE A FRANCHISE BEFORE THE EXPIRATION OF ITS TERM EXCEPT FOR GOOD CAUSE.
GOOD CAUSE SHALL INCLUDE THE FAILURE OF THE FRANCHISEE TO COMPLY WITH ANY LAWFUL PROVISIONS OF THE FRANCHISE AGREEMENT AND TO CURE SUCH FAILURE AFTER BEING GIVEN WRITTEN NOTICE THEREOF AND A REASONABLE OPPORTUNITY, WHICH IN NO EVENT NEED BE MORE THAN 30 DAYS, TO CURE SUCH FAILURE.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 27–35)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the franchise agreement can be terminated before its expiration under specific conditions, particularly if the franchisee fails to comply with the agreement's terms. For residents of Michigan, the FDD stipulates that a franchisor can only terminate a franchise agreement before its term expires if there is 'good cause'.
'Good cause' is defined as the franchisee's failure to comply with any lawful provisions of the franchise agreement. However, Cinnaholic must provide the franchisee with written notice of the failure and a reasonable opportunity to correct it. The FDD specifies that this cure period need not be more than 30 days. This means that if a Cinnaholic franchisee in Michigan violates a term of the franchise agreement, they have a chance to fix the issue within a timeframe determined by Cinnaholic, up to a maximum of 30 days, after receiving written notice.
This provision protects franchisees by ensuring they are not arbitrarily terminated for minor infractions without a chance to rectify the situation. It aligns with fair franchising practices, providing a framework for addressing breaches of contract while allowing the franchisee an opportunity to maintain their business. Prospective Cinnaholic franchisees should carefully review the franchise agreement to understand what constitutes a breach and what their rights are in case of a potential termination.