Can a Cinnaholic developer establish bakeries in any state, regardless of Cinnaholic's ability to franchise there?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
Developer may establish the Bakeries required to be developed hereunder at any location within the Area of Responsibility provided that Franchisor, in its sole discretion, consents in writing to the location, the location is in a state where Franchisor is permitted to sell CINNAHOLIC® franchises, and the location is not located in a territory in which any other CINNAHOLIC® franchisee has exclusive rights or a right of first refusal.
Source: Item 23 — RECEIPT (FDD pages 62–269)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, a developer's ability to establish bakeries is restricted to locations within their Area of Responsibility that Cinnaholic approves. However, Cinnaholic must be permitted to sell franchises in that state. This means a developer cannot establish a Cinnaholic bakery in a state where Cinnaholic is not permitted to franchise, even if the location is within the developer's designated Area of Responsibility.
Cinnaholic retains significant rights, including the right to establish and operate its own bakeries or grant rights to other franchisees, even within a developer's Area of Responsibility. This reservation of rights extends to various distribution channels and business types, potentially impacting a developer's market.
Prospective developers should carefully review Exhibit A of the Development Agreement, which outlines the Development Schedule and Area of Responsibility. They should also confirm that Cinnaholic is permitted to franchise in all states within their Area of Responsibility before entering into the agreement. Understanding these limitations is crucial for assessing the potential and risks associated with developing Cinnaholic bakeries.