Does the Cinnaholic franchisor retain the right to seek injunctive relief, and under what conditions?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
FURTHER, NOTHING HEREIN CONTAINED SHALL BAR FRANCHISOR'S RIGHT TO OBTAIN INJUNCTIVE RELIEF AGAINST THREATENED CONDUCT THAT WILL CAUSE IRREPARABLE HARM, UNDER THE USUAL EQUITY RULES INCLUDING THE APPLICABLE RULES FOR OBTAINING SPECIFIC PERFORMANCE, RESTRAINING ORDERS AND PRELIMINARY INJUNCTIONS.
- 21.2.
Arbitration.
EXCEPT TO THE EXTENT FRANCHISOR SEEKS INJUNCTIVE OR OTHER EQUITABLE RELIEF TO ENFORCE PROVISIONS OF THIS AGREEMENT, AND EXCEPT FOR CONTROVERSIES, CLAIMS OR DISPUTES BASED ON DEVELOPER'S FAILURE TO PAY ANY FEES DUE HEREUNDER WHEN DUE; DEVELOPER'S VIOLATION OF ANY HEALTH OR SAFETY LAW; OR DEVELOPER'S USE OF THE MARKS, ALL CONTROVERSIES, CLAIMS OR DISPUTES BETWEEN FRANCHISOR AND DEVELOPER ARISING OUT OF OR RELATING TO (I) THIS AGREEMENT OR ANY OTHER AGREEMENT BETWEEN FRANCHISOR AND DEVELOPER, (II) THE RELATIONSHIP BETWEEN DEVELOPER AND FRANCHISOR, OR (III) THE SCOPE AND VALIDITY OF THIS AGREEMENT OR ANY OTHER AGREEMENT BETWEEN FRANCHISOR AND DEVELOPER (INCLUDING THE SCOPE AND VALIDITY OF THE ARBITRATION OBLIGATIONS UNDER THIS SECTION, WHICH FRANCHISOR AND DEVELOPER ACKNOWLEDGE IS TO BE DETERMINED BY AN ARBITRATOR AND NOT A COURT) SHALL BE DETERMINED BY ARBITRATION WITH THE AMERICAN ARBITRATION ASSOCIATION ("AAA") AT THE OFFICE OF THE AAA CLOSEST TO FRANCHISOR'S PRINCIPAL EXECUTIVE OFFICE ON THE DATE OF SUBMISSION OF THE MATTER TO THE AAA.
Source: Item 23 — RECEIPT (FDD pages 62–269)
What This Means (2025 FDD)
According to the 2025 Cinnaholic Franchise Disclosure Document, the franchisor retains the right to seek injunctive relief under specific circumstances. Cinnaholic can pursue injunctive relief against threatened conduct that would cause irreparable harm. This allows Cinnaholic to take immediate legal action to prevent potential damage to the brand or its operations.
This right to seek injunctive relief is available to Cinnaholic under the usual equity rules, including those applicable for obtaining specific performance, restraining orders, and preliminary injunctions. This means Cinnaholic can ask a court to order a franchisee to stop certain actions or to fulfill their contractual obligations.
Furthermore, the FDD specifies that when Cinnaholic seeks injunctive or other equitable relief to enforce the provisions of the Development Agreement, such actions are exceptions to mandatory arbitration. This means Cinnaholic can pursue these legal remedies in court rather than through arbitration, allowing for quicker resolution of critical issues. The document also specifies that controversies, claims, or disputes based on a developer's failure to pay any fees when due; a developer's violation of any health or safety law; or a developer's use of the marks are exceptions to mandatory arbitration.