Does the Cinnaholic franchisor retain the right to seek injunctive relief?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
e issued and outstanding. The parties acknowledge that the covenants contained in Section 20.1 are based on the reason and understanding that Franchisee and the Bound Parties will possess knowledge of Franchisor's business and operating methods and confidential information, disclosure and use of which would prejudice the interest of Franchisor and its Franchisees. Franchisee further understands and acknowledges the difficulty of ascertaining monetary damages and the irreparable harm that would result from breach of these covenants. If any part of this restriction is found to be unreasonable in time or distance, such time or distance may be reduced by appropriate order of the court to that deemed reasonable. Franchisor shall, as a matter of course, receive injunctive relief to enforce such covenants in addition to any other relief to which it may be entitled at law or in equity. Franchisor shall receive such injunctive relief without the necessity of posting bond or other security, such bond or other security being hereby waived.
20.2. Non-Solicitation of Employees.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the franchisor retains the right to seek injunctive relief to enforce the provisions outlined in the franchise agreement. Specifically, Cinnaholic is entitled to injunctive relief to enforce covenants related to the franchisee's knowledge of Cinnaholic's business, operating methods, and confidential information. This means that if a franchisee breaches these covenants, Cinnaholic can seek a court order to stop the franchisee from continuing the harmful actions.
Furthermore, Cinnaholic is entitled to receive this injunctive relief without needing to post a bond or other security, as this requirement is waived. This simplifies and expedites the process for Cinnaholic to obtain an injunction.
However, it's important to note that Cinnaholic's right to seek injunctive relief is not absolute. According to section 31.2 of the franchise agreement, the obligation to arbitrate disputes does not apply to the extent Cinnaholic seeks injunctive or other equitable relief to enforce provisions of the agreement. Also, disputes based on the franchisee's failure to pay fees when due, violation of health or safety laws, or unauthorized use of the Marks are exempt from arbitration. This indicates that while arbitration is generally required for resolving disputes, Cinnaholic can bypass arbitration and seek immediate injunctive relief in certain critical situations, such as protecting its brand and system standards or recovering unpaid fees.