Under the Cinnaholic Development Agreement, which sections cover site selection and acquisition/lease?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
he electronic loyalty and rewards program costs, and integration with our POS system.
Site Selection. Each proposed site for a Bakery established under your Development Agreement must be located in your Area of Responsibility. Within our discretion, we may consider sites proposed by you outside your Area of Responsibility. The proposed site for your Bakery must be accepted by us along with any applicable lease, sublease or purchase agreement. Under the Development Agreement, we will determine or approve the location of future units and any territories for those units, and the then-current standards for sites and territories will apply. We may help you select the site for your Bakery, although we are not obligated to do so. The site for your Bakery may be leased or owned by you. Our approval of a site will be based on the information you give us to review, including a site plan. The information we need should include: (i) square footage; (ii) traffic patterns, flow, and total count; (iii) density and income level of the surrounding population; (iv) land and building costs; (v) zoning patterns; (vi) surrounding educational and recreational facilities; (vii) terms of the lease, if any; (viii) the distance from competing businesses, including other CINNAHOLIC® Bakeries; and (ix) other factors having a substantial bearing on the proposed site. (See Development Agreement, Section 7.) In addition, you must submit for acceptance by us proposed site and construction plans and any modification to our specifications you propose. The construction of the premises must be completed according to our specifications. If you lease the premises, you and the landlord must enter into a Collateral Assignment of Lease in the form attached as Exhibit B to the Development Agreement, which includes, among other things, a provision that permits you to assign your interest in the premises to us when your Franchise Agreement expires or terminates. If we do not approve a site, you must propose a new site. If we and you are unable to agree upon a site for your Bakery and, as a result, you fail to meet your Development Schedule, we may terminate your Development Agreement. While there is no contractual limit on the time it takes us to approve or disapprove your proposed site and lease, once we have all the necessary documentation for review, we typically take 30-60 days to approve or disapprove the proposed site and lease.
Start-up Time. We expect that you will open your Bakery within 8 to 12 months after you sign the Franchise Agreement. The factors that affect this timing are financing, building permits, zoning, local ordinance issues, and delayed installation of equipment, fixtures, and signs. If you do not commence operation of the Bakery within 12 months after the effective date of the Franchise Agreement, we may terminate the Franchise Agreement.
Conferences and Meetings.
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 26–27)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, site selection is covered under Section 7 of the Development Agreement. Item 11 of the FDD also references Section 7 of the Development Agreement regarding site selection.
Specifically, Section 7.1 outlines the developer's responsibility for locating potential sites for Cinnaholic bakeries. Cinnaholic may offer advice, but ultimately, the developer must submit site data, demographic information, and any lease, sublease, or purchase agreements for the site. Cinnaholic has the right to accept or reject any proposed site at its discretion. Section 7.2 contains a disclaimer that the developer bears the sole risk if they acquire a site before Cinnaholic provides written acceptance.
Item 8 also mentions that Cinnaholic must approve the site, and if the site is leased, the franchisee must collaterally assign the lease to Cinnaholic. Item 23 further states that Cinnaholic will either accept or reject the proposed site based on its current site selection policies and procedures. The developer must also ensure that the lessor signs the Collateral Assignment of Lease. Cinnaholic's acceptance may depend on the developer meeting additional requirements related to the lease or purchase agreement.