What are the effects of expiration or termination of the Cinnaholic franchise agreement?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
have the right to terminate this Agreement upon 30 days written notice if Developer fails to comply with any other provisions of this Agreement and such failure remains uncured in Franchisor's sole discretion; provided, however, if the breach is curable but is of a nature which cannot reasonably be cured within such 30 day period and Developer has commenced and is continuing to make good faith efforts to cure such breach, Developer shall be given an additional 30 day period to cure the same, and this Agreement shall not terminate.
- 12.4. Effect of Expiration or Termination. Upon the expiration or termination of this Agreement for any reason, any and all rights granted to Developer hereunder shall be extinguished immediately, and Developer shall not be relieved of any of its obligations, debts or liabilities hereunder. All rights and licenses granted to Developer hereunder to develop Bakeries shall revert to the Franchisor and the Franchisor shall have the right to develop, or license others to develop, Bakeries. Developer shall have no further rights to develop further Bakeries and Developer shall immediately cease all use of the Marks, except as permitted under the terms of a fully executed Franchise Agreement, which is in effect at the time of the termination or expiration. With respect to such then-effective Franchise Agreements, Developer shall retain its interest as a franchisee thereunder, provided that Developer is not in default under such Franchise Agreements. Developer shall pay all sums due to Franchisor or its affiliates. Upon the termination or expiration of this Agreement, Developer shall also undertake the following: (i) strictly comply with the post-termination/post-expiration covenant not to compete set forth herein; and (ii) continue to abide by those restrictions pertaining to the use of Franchisor's confidential information and proprietary information as set forth herein. The expiration and termination of this Agreement will be without prejudice to the rights of the Franchisor against Developer and the expiration or termination will not relieve Developer of any of its obligations to Franchisor existing at the time of such expiration or termination, or terminate those obligations of the Developer which by their nature survive the expiration or termination of this Agreement.
13. ASSIGNMENT
13.1. Assignment by Franchisor. This Agreement may be unilaterally assigned by the Franchisor and shall inure to the benefit of its successors and assigns.
Source: Item 23 — RECEIPT (FDD pages 62–269)
What This Means (2025 FDD)
According to the 2025 Cinnaholic Franchise Disclosure Document, the expiration or termination of the Development Agreement has several important implications for the developer. All rights granted to the developer to develop Cinnaholic bakeries are immediately extinguished, and the developer is not relieved of any outstanding obligations, debts, or liabilities. All rights and licenses to develop bakeries revert back to Cinnaholic, which then has the right to develop those bakeries themselves or license others to do so. The developer loses any further rights to develop additional Cinnaholic locations. They must immediately stop using Cinnaholic's trademarks, unless permitted under an existing Franchise Agreement that remains in effect.
If the developer has existing Franchise Agreements that are still in effect at the time of termination or expiration, the developer retains their interest as a franchisee under those agreements, as long as they are not in default. The developer is also responsible for paying all sums due to Cinnaholic or its affiliates.
Furthermore, upon termination or expiration, the developer must comply with the post-termination covenant not to compete and continue to abide by restrictions on using Cinnaholic's confidential and proprietary information. The expiration or termination of the Development Agreement does not waive Cinnaholic's rights against the developer, nor does it relieve the developer of obligations existing at the time of termination or those obligations that naturally survive the agreement's end. This includes transferring interest in internet websites and listings to Cinnaholic upon termination of the Franchise Agreement.