Is the franchisee's right to operate a Cinnaholic Bakery exclusive at the Franchised Site?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
3.3. Reservation of Rights. Franchisor retains the right, in its sole discretion, to:
(i) Establish and operate, and grant to other franchisees or licensees the right to establish and operate, a CINNAHOLIC® Bakery or any other business using the Marks, the CINNAHOLIC® System or any variation of the Marks and the CINNAHOLIC® System, in any location outside the Franchise Territory, on any terms and conditions that Franchisor deems appropriate;
(ii) Develop, use and franchise anywhere (including within the Franchise Territory) the rights to any trade names, trademarks, service marks, commercial symbols, emblems, signs, slogans, insignia, patents or copyrights not designated by Franchisor as Marks, for use with similar or different franchise systems for the sale of similar or different products or services than those constituting a part of the CINNAHOLIC® System, without granting Franchisee any rights therein;
(iii) Offer, ship, sell and provide products or services identified by the Marks or other trademarks, service marks, commercial symbols or emblems to customers located in the Franchise Territory through any distribution channel or method, including grocery stores, convenience stores, Internet (or any other existing or future form of electronic commerce), and delivery services, irrespective of the proximity to the Bakery without compensation to Franchisee; provided, however, that any such sales will not be made from a CINNAHOLIC® Bakery located in the Franchise Territory;
(iv) Own, acquire, establish and/or operate and license to others to establish and operate CINNAHOLIC® Franchises at destination locations which may be within the Territory, including but not limited to airports, stadiums, schools, and universities, hospitals, malls, shopping center food courts, or kiosks at any such facility;
(v) Own, operate, franchise or license anywhere, even in close proximity to the Bakery licensed hereunder, bakeries of any other type whatsoever operating under marks other than the Marks; and
(vi) Engage in any other activity, action or undertaking that Franchisor is not expressly prohibited from taking under this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the rights granted to a franchisee to operate a Cinnaholic Bakery at the Franchised Site are non-exclusive. This means that while the franchisee is restricted to operating a single Cinnaholic Bakery at the specific location outlined in Exhibit A, Cinnaholic retains the right to establish or franchise other bakeries or businesses using the Cinnaholic brand outside the franchisee's designated Franchise Territory.
Furthermore, Cinnaholic reserves significant rights regarding the brand and its distribution. They can develop and franchise other trademarks not designated as 'Marks,' sell products through various channels like grocery stores or the internet, and establish Cinnaholic franchises at destination locations such as airports or universities, even within the franchisee's territory. These activities can occur without compensating the franchisee.
This lack of exclusivity and territorial protection has important implications for prospective franchisees. While a franchisee will have an exclusive territory, Cinnaholic retains considerable freedom to operate or franchise other businesses under different marks, or to sell Cinnaholic products through alternative channels, even within the franchisee's territory. A prospective franchisee should carefully consider these factors and how they might impact the potential profitability of their Cinnaholic Bakery.