Can Cinnaholic develop and franchise trademarks not designated as 'Marks' for similar businesses within a Cinnaholic franchisee's territory?

According to Cinnaholic's 2025 Franchise Disclosure Document, Cinnaholic retains specific rights regarding trademarks and franchise systems. Cinnaholic has the right to develop, use, and franchise trade names, trademarks, service marks, commercial symbols, emblems, signs, slogans, insignia, patents, or copyrights not designated as 'Marks.' This right extends to anywhere, including within a franchisee's territory.

This means Cinnaholic can create and franchise other businesses, even those similar to Cinnaholic, within a franchisee's territory, as long as they use different trademarks than the 'Marks' associated with the Cinnaholic franchise. The new franchise systems could sell similar or different products or services without granting the existing Cinnaholic franchisee any rights to these new ventures.

For a prospective franchisee, this clause indicates a lack of exclusivity beyond the specific Cinnaholic brand and territory outlined in Exhibit A. Cinnaholic retains the freedom to introduce competing, albeit differently branded, businesses within the same territory. This could potentially impact a franchisee's market share and revenue, as Cinnaholic is not restricted from developing similar concepts under different branding.

Therefore, while a Cinnaholic franchisee is granted a specific territory for their Cinnaholic bakery, they should be aware that Cinnaholic reserves the right to operate or franchise other businesses, even similar ones, within that same territory using different branding. This is a crucial consideration for potential franchisees evaluating the long-term competitive landscape and market potential of their investment.