Does Cinnaholic consider the marketplace a factor that could impact my franchise's success?

According to Cinnaholic's 2025 Franchise Disclosure Document, the questionnaire in Exhibit I addresses the franchisee's understanding that other Cinnaholic bakeries or methods of distribution may compete with their bakery and adversely affect its sales. This indicates that Cinnaholic acknowledges the potential impact of competition and market factors on a franchisee's success. The questionnaire requires prospective franchisees to confirm their understanding that the only radius restriction concerning where another franchised or company Cinnaholic Bakery may open is the limited protected territory specified in their Franchise Agreement. This highlights the importance of carefully reviewing and understanding the terms of the Franchise Agreement regarding protected territories.

Cinnaholic retains the right to establish and operate, or grant to other franchisees or licensees the right to establish and operate, a Cinnaholic Bakery or any other business using the Marks, the Cinnaholic System or any variation of the Marks and the Cinnaholic System, in any location outside the Franchise Territory, on any terms and conditions that Cinnaholic deems appropriate. Cinnaholic also retains the right to offer, ship, sell and provide products or services identified by the Marks or other trademarks, service marks, commercial symbols or emblems to customers located in the Franchise Territory through any distribution channel or method, including grocery stores, convenience stores, Internet (or any other existing or future form of electronic commerce), and delivery services, irrespective of the proximity to the Bakery without compensation to Franchisee; provided, however, that any such sales will not be made from a Cinnaholic Bakery located in the Franchise Territory. These stipulations mean that while a franchisee may have a protected territory, Cinnaholic can still operate or franchise other locations outside that territory and sell products within the territory through various channels, potentially impacting the franchisee's sales.

Furthermore, Cinnaholic can own, acquire, establish and/or operate and license to others to establish and operate Cinnaholic Franchises at destination locations which may be within the Territory, including but not limited to airports, stadiums, schools, and universities, hospitals, malls, shopping center food courts, or kiosks at any such facility. Cinnaholic can also own, operate, franchise or license anywhere, even in close proximity to the Bakery licensed hereunder, bakeries of any other type whatsoever operating under marks other than the Marks; and engage in any other activity, action or undertaking that Franchisor is not expressly prohibited from taking under this Agreement. These rights retained by Cinnaholic underscore the importance of a franchisee understanding the competitive landscape and potential market saturation, even within their territory, and the need to proactively manage their business to succeed in a competitive environment.