In California, are the Cinnaholic franchise agreement's covenants not to compete that extend beyond termination always enforceable?

According to Cinnaholic's 2025 Franchise Disclosure Document, non-compete covenants extending beyond the termination of the Franchise Agreement or Development Agreement may not be enforceable under California law. This means that if a Cinnaholic franchisee in California leaves the franchise system, the standard non-compete clauses in the agreement that would typically restrict them from engaging in similar business activities might not hold up in court.

This lack of enforceability is a significant point for prospective franchisees to consider. On one hand, it offers more freedom and flexibility for franchisees after they exit the Cinnaholic system, allowing them to pursue other business ventures without the threat of legal action from Cinnaholic. On the other hand, it also means that a franchisee could potentially open a competing business near their former Cinnaholic location shortly after leaving the system, which could impact the remaining Cinnaholic franchise's business.

It's important for potential Cinnaholic franchisees in California to consult with a legal professional to fully understand the implications of this provision. They should discuss the specific language of the non-compete clauses in the Franchise Agreement and Development Agreement and how California law might affect their enforceability. This will help them make an informed decision about investing in a Cinnaholic franchise and plan for their future business endeavors, both within and potentially outside the Cinnaholic system.