What must a Cinnaholic franchisee comply with at all times?

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You will operate a CINNAHOLIC® Bakery, at your expense, as an independent business utilizing our business format, procedures, designs, trade dress, standards, specifications, and methods of operation. You must use the CINNAHOLIC® franchise system at your Bakery, which includes, without limitation, the common use and promotion of the name CINNAHOLIC® and other service marks, trademarks, trade names, logos, emblems, signs, slogans, insignia and other commercial symbols we may designate periodically (collectively, the "Marks"); distinctive food products, recipes and quality standards; procedures for inventory and management control; training; advertising and promotional programs; and ongoing assistance. We may periodically add or delete products and/or services and change specifications, standards, procedures, and methods of operation, and you will be expected to follow suit. You will offer and provide products and services to the general public, at all times complying with the Franchise Agreement and our confidential operations manual (the "Operations Manual") that will be loaned to you at the time of training. You may only offer services and products that we have previously approved.

Competition. CINNAHOLIC® Bakeries compete primarily with other cinnamon roll bakeries, such as Cinnabon®, bakeries in general and bakery cafes that offer similar menus, including regional and national chains and franchise systems. The cinnamon roll bakery business is very competitive which is often driven by strong price competition, however, we believe that we have created a niche market with CINNAHOLIC® bakery by creating a specialty bakery with a unique quality, custom gourmet products, trade dress and appearance which is easily distinguishable from other cinnamon roll bakeries. Previous business management experience is helpful for new franchisees, and previous bakery or restaurant management experience is highly desirable. Previous business ownership experience also is highly desirable.

The Agreements. You must enter into a Market Development Agreement, the current form of which is attached to this Disclosure Document as Exhibit B (the "Development Agreement"). Under the Development Agreement, you must develop, open and operate an agreed upon number of Bakeries located in an area of responsibility (the "Area of Responsibility") in accordance with an agreed upon development schedule (the "Development Schedule").

Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 6–8)