Does the Cinnaholic Development Agreement grant a protected territory?

You must enter into a Market Development Agreement, the current form of which is attached to this Disclosure Document as Exhibit B (the "Development Agreement"). Under the Development Agreement, you must develop, open and operate an agreed upon number of Bakeries located in an area of responsibility (the "Area of Responsibility") in accordance with an agreed upon development schedule (the "Development Schedule"). You must enter into a Development Agreement even if you will establish only one Bakery. There is no preset minimum or maximum number of Bakeries that you may agree to establish in connection with a Development Agreement. The number of Bakeries to be developed is negotiated between you and us on a case-by-case basis. The Development Agreement will expire on the day after operations of the final Bakery to be established under the Development Agreement are required to begin as provided on the Development Schedule. The Development Agreement will not grant any protected territory, exclusivity or other rights in which to establish your Bakeries in the Area of Responsibility. You may establish your Bakeries at any location within the Area of Responsibility provided we consent to the location, which may be withheld or granted in our sole discretion, the location is in a state where we are permitted to sell CINNAHOLIC® franchises, and the Bakery is not located in the franchise territory granted to another CINNAHOLIC® franchisee. Within our sole discretion, we may consider a location proposed by you outside your Area of Responsibility.

You will operate each Bakery to be developed under the Development Agreement under a separate Franchise Agreement. Upon establishing each additional outlet under the Development Agreement, a developer may be required to sign a then-current Franchise Agreement, which may differ from the current Franchise Agreement included within this FDD. The Franchise Agreement will grant you a protected territory (the "Franchise Territory"), the size and scope of which will be determined on a case-by-case basis by considering the population, traffic flow, presence of businesses, location of competitors (including other CINNAHOLIC® franchisees), demographics and other market conditions surrounding the location of the Bakery. The Franchise Territory may not be unilaterally altered, and the continuation of the Franchise Territory during the term of the Franchise Agreement does not depend on a certain sales or revenue volume or market penetration. We may not operate, or permit any other person to operate, a CINNAHOLIC® Bakery in the Franchise Territory during the term of the Franchise Agreement; although, we may distribute products, or permit others to distribute products, which are the same or similar to those offered by CINNAHOLIC® Bakeries, whether under the Marks or under other trademarks, trade names, service marks, logos or other commercial symbols and through any channel of distribution or method other than a CINNAHOLIC® Bakery within the Franchise Territory, including sales through catalogs, e-commerce, mail order, kiosks, mass merchandise, grocery stores, supermarkets, mom & pops, gourmet shops, warehouse clubs, and convenience and other stores, even if you sell these products at your Bakery. We may also operate or permit others to operate CINNAHOLIC® bakeries at non-traditional locations within your Franchise Territory such as sports stadiums, arenas, universities and schools, hospitals, airports, shopping malls, and the like.

Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 6–8)