factual

In the Cinnaholic franchise agreement, does the invalidity of a term's application to one person affect its application to other people?

Cinnaholic Franchise · 2025 FDD

Answer from 2025 FDD Document

If any term, restriction or covenant of this Agreement is deemed invalid or unenforceable, all other terms, restrictions and covenants and the application thereof to all persons and circumstances subject hereto shall remain unaffected to the extent permitted by law; and if any application of any term, restriction or covenant to any person or circumstance is deemed invalid or unenforceable, the application of such terms, restriction or covenant to other persons and circumstances shall remain unaffected to the extent permitted by law.

Source: Item 23 — RECEIPT (FDD pages 62–269)

What This Means (2025 FDD)

According to the 2025 Cinnaholic Franchise Disclosure Document, the severability clause addresses the scenario where a term, restriction, or covenant within the agreement is deemed invalid or unenforceable. This clause ensures that the remaining provisions of the agreement remain in full effect, as permitted by law. Specifically, if a court finds that applying a particular term to one person or circumstance is invalid, the enforceability of that term for other individuals or situations is not automatically negated. Instead, the term remains valid and enforceable in those other contexts, again, as permitted by law. This is a standard clause in franchise agreements.

For a prospective Cinnaholic franchisee, this means that if a specific part of the franchise agreement is successfully challenged in court by another franchisee or in a specific situation, it does not automatically invalidate the entire agreement or that specific part's applicability to their franchise. The ruling would be limited to the specific case and the specific individual or circumstance involved. The remaining terms and their application to other franchisees would continue to be binding and enforceable.

This clause provides a level of stability and predictability for both Cinnaholic and its franchisees. It prevents the entire agreement from being thrown into disarray due to a single point of contention. Franchisees can be reasonably assured that their rights and obligations under the agreement will remain in effect, even if another franchisee challenges a specific aspect of the agreement. However, the phrase "to the extent permitted by law" adds a layer of complexity, as the specific interpretation and application of the severability clause can depend on the governing law and the specific facts of each case.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.