For Cinnaholic, what is the duration of the post-term non-competition agreement following the termination or expiration of the agreement?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
managers, as applicable, and their spouses (each, a "Bound Party"), agree that they will not, during the term of this Agreement, directly or indirectly, for and on behalf of itself, himself, herself or any other person or entity, (a) have any direct or indirect interest as a disclosed or beneficial owner in a Competitive Business (as defined below), regardless of location or (b) perform services as a director, officer, manager, employee, consultant, representative, agent, or otherwise for a Competitive Business, regardless of location.
(ii) Post-Term Non-Competition. In addition to and not in limitation of any other restrictions on Developer contained herein, Developer and the Bound Parties agree that they will not, for one year following the effective date of termination or expiration of this Agreement for any reason, or following the date of a Transfer by Developer, directly or indirectly, for and on behalf of itself, himself, herself or any other person or entity, (a) have any direct or indirect interest as a disclosed or beneficial owner in a Competitive Business or (b) perform services as a director, officer, manager, employee, consultant, representative, agent, or otherwise for a Competitive Business which, in either case, is located or operating within a five mile radius of any CINNAHOLIC® Bakery.
(iii) General. For purposes of this Agreement, the term "Competitive Business" means any business operating, or granting franchises or licenses to others to operate, a bakery or other food service business (a) engaged in the retail or wholesale production or sale of baked goods (including, but not limited to, all cinnamon rolls and other baked goods) and (b) that derives more than 50% of its revenue from sales of cinnamon rolls (other than another CINNAHOLIC® Bakery operated by Developer under license from Franchisor).
Source: Item 23 — RECEIPT (FDD pages 62–269)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, after the franchise agreement terminates or expires, the franchisee and other bound parties agree not to engage in any Competitive Business for one year. This restriction applies to having a direct or indirect interest in a Competitive Business or performing services for one. A Competitive Business is defined as a bakery or food service business that derives more than 50% of its revenue from cinnamon roll sales, within a five-mile radius of any Cinnaholic Bakery.
This means that for one year after leaving the Cinnaholic system, a former franchisee cannot own or work for a competing cinnamon roll business near a Cinnaholic location. This non-compete agreement is designed to protect Cinnaholic's market share and confidential business information. The agreement also prevents franchisees from using the knowledge and experience gained while operating a Cinnaholic franchise to directly compete with the brand shortly after leaving the system.
Additionally, the Cinnaholic Franchise Disclosure Document states that the franchisee and other bound parties agree not to solicit or interfere with the employment relationships between Cinnaholic and its employees or between any other Cinnaholic franchisee and its employees for one year after the agreement expires or terminates. This prevents a departing franchisee from poaching employees and disrupting the operations of existing Cinnaholic locations.