What agreement must a Cinnaholic franchisee enter into?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
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The Agreements. You must enter into a Market Development Agreement, the current form of which is attached to this Disclosure Document as Exhibit B (the "Development Agreement"). Under the Development Agreement, you must develop, open and operate an agreed upon number of Bakeries located in an area of responsibility (the "Area of Responsibility") in accordance with an agreed upon development schedule (the "Development Schedule"). You must enter into a Development Agreement even if you will establish only one Bakery. There is no preset minimum or maximum number of Bakeries that you may agree to establish in connection with a Development Agreement. The number of Bakeries to be developed is negotiated between you and us on a case-by-case basis. The Development Agreement will expire on the day after operations of the final Bakery to be established under the Development Agreement are required to begin as provided on the Development Schedule. The Development Agreement will not grant any protected territory, exclusivity or other rights in which to establish your Bakeries in the Area of Responsibility. You may establish your Bakeries at any location within the Area of Responsibility provided we consent to the location, which may be withheld or granted in our sole discretion, the location is in a state where we are permitted to sell CINNAHOLIC® franchises, and the Bakery is not located in the franchise territory granted to another CINNAHOLIC® franchisee. Within our sole discretion, we may consider a location proposed by you outside your Area of Responsibility.
You will operate each Bakery to be developed under the Development Agreement under a separate Franchise Agreement. Upon establishing each additional outlet under the Development Agreement, a developer may be required to sign a then-current Franchise Agreement, which may differ from the current Franchise Agreement included within this FDD. The Franchise Agreement will grant you a protected territory (the "Franchise Territory"), the size and scope of which will be determined on a case-by-case basis by considering the population, traffic flow, presence of businesses, location of competitors (including other CINNAHOLIC® franchisees), demographics and other market conditions surrounding the location of
Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 6–8)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, a franchisee must enter into a Market Development Agreement. This agreement mandates the franchisee to develop, open, and operate a pre-determined number of Cinnaholic bakeries within a specific area of responsibility, following an agreed-upon development schedule. This agreement is required even if the franchisee intends to establish only a single bakery. The number of bakeries to be developed is determined through negotiations between the franchisee and Cinnaholic. The Development Agreement does not grant any protected territory or exclusivity for establishing the bakeries.
Under the Development Agreement, the franchisee will operate each bakery under a separate Franchise Agreement. Upon establishing each additional outlet, the franchisee may be required to sign the then-current Franchise Agreement, which could differ from the one included in the FDD. The Franchise Agreement grants a protected territory, the size and scope of which is determined on a case-by-case basis considering factors like population, traffic flow, presence of businesses, location of competitors, demographics, and other market conditions.
The Development Agreement expires the day after operations of the final bakery are required to begin, as outlined in the development schedule. Cinnaholic's consent is required for the location of each bakery, and such consent can be withheld at Cinnaholic's discretion. The location must also be in a state where Cinnaholic is permitted to sell franchises and not within another franchisee's territory. Cinnaholic may consider locations outside the franchisee's area of responsibility at its sole discretion.