Under Illinois law, when will the payment of Initial Franchise/Development Fees for a Cinnaholic franchise be deferred?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
t. These additional disclosures appear in Exhibit E attached to this Disclosure Document.
Exhibit F
State Specific Addenda
(See Attached)
CINNAHOLIC FRANCHISING, LLC ADDENDUM TO MARKET DEVELOPMENT AGREEMENT (California)
The following Addendum modifies and supersedes the Cinnaholic Franchising, LLC Market Development Agreement (the "Agreement") with respect to CINNAHOLIC franchises offered or sold to either a resident of the State of California or a non-resident who will be operating a CINNAHOLIC franchise in the State of California pursuant to the California Franchise Investment Law §§ 31000 through 31516, and the California Franchise Relations Act, California Business and Professions Code §§ 20000 through 20043, as follows:
1.
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, Illinois law stipulates that the payment of Initial Franchise/Development Fees will be deferred under specific conditions. This deferral remains in effect until Cinnaholic has fulfilled its initial obligations to the franchisee. Furthermore, the franchisee must have commenced business operations before these fees become due. The Illinois Attorney General's Office imposed this financial assurance requirement due to Cinnaholic's financial condition.
This requirement is outlined in the Cinnaholic Franchising, LLC Addendum to the Market Development Agreement specifically for Illinois. This addendum modifies the original agreement to comply with the Illinois Franchise Disclosure Act of 1987. The addendum applies to both Illinois residents and non-residents who will operate a Cinnaholic franchise within the state.
For a prospective Cinnaholic franchisee in Illinois, this deferral offers a significant benefit. It reduces the initial financial burden by postponing the payment of fees until Cinnaholic has met its obligations and the franchise is up and running. This arrangement provides some financial security, ensuring that franchisees are not paying fees upfront before the franchisor delivers on its promises and the business is operational. Franchisees should confirm with Cinnaholic what constitutes fulfillment of initial obligations and when business operations are considered to have commenced to avoid any confusion regarding payment deadlines.