When must the Bound Party of a Cinnaholic franchisee sign and deliver the Personal Covenants to the Franchisor?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
As a condition to the effectiveness of this Agreement, and at the time Franchisee delivers this signed Agreement to Franchisor, each Bound Party of Franchisee must sign and deliver to Franchisor the Personal Covenants attached hereto as Exhibit B (the "Personal Covenants"), agreeing to be bound personally by all the provisions of Sections 20.1, 20.2 and 20.3 hereof.
If there are any changes in the identity of any such Bound Party while this Agreement is in effect, Franchisee must notify Franchisor promptly and make sure the new Bound Party signs and delivers to Franchisor the Personal Covenants.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, as a condition for the franchise agreement to take effect, each Bound Party of the franchisee must sign and deliver the Personal Covenants to Cinnaholic at the same time the franchisee delivers the signed Franchise Agreement to Cinnaholic. These Personal Covenants are included as Exhibit B to the Franchise Agreement. By signing these covenants, the Bound Parties agree to be personally bound by the provisions outlined in Sections 20.1, 20.2, and 20.3 of the agreement.
This requirement ensures that individuals with a significant connection to the franchisee's business, such as owners or managers, are also held responsible for upholding specific obligations within the franchise agreement. These obligations typically relate to non-competition, non-solicitation, and the protection of Cinnaholic's trade secrets and confidential information.
Furthermore, if there are any changes to the Bound Parties during the term of the Franchise Agreement, the franchisee is obligated to promptly inform Cinnaholic. The new Bound Party must then sign and deliver the Personal Covenants to Cinnaholic. This provision ensures that all individuals in a position to impact the Cinnaholic business are bound by the same restrictions and obligations.