What is the extent of the territorial protection offered by Cinnaholic?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
its and their officers, directors, shareholders, managers, members, partners, employees and agents; and (ix) Franchisee provides Franchisor with evidence that Franchisee has the right to remain in possession of the Franchised Site or to secure and develop a suitable alternative site acceptable to Franchisee for the renewal term.
3. FRANCHISED SITE AND TERRITORY
- 3.1. Franchised Site. The rights granted to Franchisee hereunder shall be non-exclusive and shall be restricted to the operation of a single CINNAHOLIC® Bakery to be located at the address and location set forth on Exhibit A attached hereto (the "Franchised Site"). During the term of this Agreement, the Franchised Site shall be used exclusively to operate a Bakery. In connection with the execution of any lease or sublease for the Franchised Site, Franchisee must execute, and cause the lessor and/or sublessor of the Franchised Site to execute, the Collateral Assignment of Lease attached to the Market Development Agreement entered into between Franchisor and Franchisee (the "Development Agreement"), in addition to complying with any other obligations and conditions contained in the Development Agreement relating to the lease or sublease of the Franchised Site and the development and construction of the Bakery. The rights granted to Franchisee are for the specific Franchised Site and cannot be transferred to any other location, except with Franchisor's prior written approval. After you sign a lease for the Franchised Site, you will pay us a Project Management Fee, currently $1,795, and we will assist you in developing your Bakery site but monitoring construction and build-out progress, attempting to identify potential bottlenecks, and otherwise help expedite pre-construction activities.
- 3.2. Territorial Protection. Franchisor will not establish for itself or grant a franchise to any other party to establish a Bakery within the territory specified on Exhibit A attached hereto (the "Franchise Territory"). Notwithstanding anything herein to the contrary, if any disagreement arises regarding the area comprising the Franchise Territory, then Franchisor's decision as to the definition of the Franchise Territory shall be final and binding. Except as expressly provided in the first sentence of this Section 3.2, Franchisee acknowledges that the franchise granted under this Agreement is non-exclusive and Fra
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to the 2025 Cinnaholic Franchise Disclosure Document, a franchisee's rights are restricted to operating a single Cinnaholic Bakery at the location specified in Exhibit A of the franchise agreement. Cinnaholic grants a limited protected territory to its franchisees, described in Exhibit A.
However, the franchisor retains several rights that could impact a franchisee's territory. Cinnaholic can establish or franchise other Cinnaholic Bakeries outside the Franchise Territory. They can also develop other franchise systems using trademarks different from the Cinnaholic marks, even within the franchisee's territory. Cinnaholic retains the right to sell products through various distribution channels, including grocery stores, the internet, and delivery services, even within the franchisee's territory, as long as these sales do not originate from another Cinnaholic Bakery located within the franchisee's territory.
Cinnaholic also reserves the right to establish Cinnaholic franchises at destination locations like airports, stadiums, schools, universities, hospitals, malls, and shopping center food courts, even if these are within the franchisee's territory. The agreement explicitly states that the franchise is non-exclusive, and the franchisee has no right to control the development of other franchises or sales activities of Cinnaholic or its licensees, except for the limited protected territory. If there is any disagreement regarding the area comprising the Franchise Territory, Cinnaholic's decision is final and binding.