Does the Cinnaholic agreement specify any geographic limitations related to the post-termination obligations?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon the termination or expiration of this Agreement, whether by reason of lapse of time, default in performance, abandonment of the Bakery or other cause or contingency, Franchisee shall:
(i) forthwith return to Franchisor all material furnished by Franchisor containing confidential information, operating instructions, business practices, or methods or procedures, including, without limitation, the Operations Manual;
(ii) discontinue at the Franchised Site all use of the Marks, and the use of any and all signs, products, paper goods and other items bearing the Marks.
Any signs containing the Marks which Franchisee is unable to remove within one day of the termination or expiration of this Agreement shall be completely covered by Franchisee until the time of their removal which shall be within 10 days of termination or expiration of this Agreement;
(iii) if Franchisee retains possession of the Franchised Site, at Franchisee's expense, make such reasonable modifications to the exterior and interior décor of the Bakery and the Franchised Site as Franchisor requires to eliminate its identification as a CINNAHOLIC® Bakery and to avoid violation of the non-compete provision;
(iv) refrain from operating or doing business under any name or in any manner that may give the general public the impression that this Agreement is still in force or that Franchisee is connected in any way with Franchisor or that Franchisee has the right to use the CINNAHOLIC® System or the Marks;
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
Based on the 2025 Cinnaholic Franchise Disclosure Document, the agreement outlines post-termination obligations but does not explicitly define geographic limitations within the provided excerpts. Upon termination or expiration of the agreement, the franchisee must return all confidential materials, discontinue using Cinnaholic's marks, modify the franchise site to remove Cinnaholic branding, and avoid giving the impression that the agreement is still in effect.
While the FDD details the actions a franchisee must take upon termination, such as removing signage and branding, it does not specify how far away from the former Cinnaholic location these restrictions apply. The absence of geographic limitations in these obligations could mean that a former franchisee is not restricted from opening a competing business nearby, as long as they adhere to the other post-termination requirements.
Prospective franchisees should carefully review the full franchise agreement and consult with a legal professional to fully understand the scope of any non-compete clauses or geographic restrictions that may apply post-termination. It would be prudent to ask Cinnaholic for clarification on whether any unwritten policies or interpretations exist regarding geographic limitations on post-termination activities.