Does the Cinnaholic Franchise Agreement contain non-compete and non-solicitation covenants that extend beyond the franchise termination, and are these enforceable under California law?

According to Cinnaholic's 2025 Franchise Disclosure Document, the Franchise Agreement does contain non-compete and non-solicitation covenants that extend beyond the termination of the franchise. Specifically, after the agreement terminates, franchisees are restricted from engaging in a competitive business within a five-mile radius of any Cinnaholic bakery for one year. Additionally, franchisees are prohibited from soliciting Cinnaholic employees or the employees of other Cinnaholic franchisees for one year after the agreement ends.

However, the FDD also states that these provisions may not be enforceable under California law. This is further reinforced by the inclusion of a California-specific addendum that modifies the standard franchise agreement for franchisees operating in California.

Prospective franchisees in California should be aware that while Cinnaholic includes these restrictive covenants in its standard agreement, their enforceability is questionable under California law. Franchisees should seek legal advice to fully understand their rights and obligations regarding these covenants, as California law tends to disfavor non-compete agreements.