Does the Cinnaholic franchisor own the Cinnaholic system?

|----------------|------------|----------------------| | a Georgia Limited Liability Company ("Franchisor") with its principal office at 1567 Mt. Vernon Road, | | | | | Suite 112 Atlanta, GA 30338, and, a, with (its principal | | | | | office) (his/her residence) at ("Franchisee"). | | | | | | | | |

W I T N E S S E T H:

WHEREAS, Franchisor at a substantial expenditure of time, effort and money has established a system of developing, opening, operating and promoting casual bakeries specializing in offering custom gourmet cinnamon rolls and other food products and related bakery services under the name "CINNAHOLIC®" ("CINNAHOLIC® Bakeries" or "Bakeries") (the "CINNAHOLIC® System"); and

WHEREAS, the distinguishing features of the CINNAHOLIC® System, include, but are not limited to, the name "CINNAHOLIC®" and all such other trade names, trademarks, service marks, logos, emblems, insignia and signs developed for use with the CINNAHOLIC® System from time to time (collectively, the "Marks"); specially designed fixtures, equipment, facilities, containers, and other items used in serving and dispensing food products; products, methods, procedures, recipes, distinctive food products and the formula and quality standards therefor; and instructional materials and training courses; all of which may be changed, improved and further developed by Franchisor from time to time; and

WHEREAS, Franchisor has acquired knowledge and experience in the composition, distribution, advertising and sale of food products by Bakeries using the CINNAHOLIC® System and with respect to the style of the facilities and signs used by said Bakeries and has successfully established a reputation, demand and goodwill for the products sold by such Bakeries; and

WHEREAS, CINNAHOLIC® Bakeries and the products sold therein have a reputation for quality that has been acquired and is being maintained by requiring all franchisees of the CINNAHOLIC® System to maintain high standards of quality and service; and

WHEREAS, Franchisee recognizes the value and benefits to be derived from utilizing the CINNAHOLIC® System and being associated with Franchisor, the Marks and other distinctive features of the CINNAHOLIC® System, and now desires to obtain a franchise from Franchisor to use the CINNAHOLIC® System and to operate a CINNAHOLIC® Bakery at an approved location, and Franchisor is willing to grant Franchisee the right to operate a CINNAHOLIC® Bakery, all subject to the terms and conditions hereinafter set forth.

NOW, THEREFORE, for and in consideration of the covenants and agreements hereinafter set forth, it is mutually understood, agreed and covenanted as follows:

1. GRANT OF FRANCHISE

During the term of this Agreement, Franchisor hereby grants to Franchisee the non-exclusive right and license, and Franchisee undertakes the obligation, to develop and operate a CINNAHOLIC® Bakery and to use solely in connection therewith, the Marks and the CINNAHOLIC® System in accordance with the terms and conditions of this Agreement only at the Franchised Site, assuch term is hereinafter defined. Franchisee agrees to use the Marks and CINNAHOLIC® System, as they are changed, improved and further developed by Franchisor from time to time. Unless otherwise agreed to by Franchisor, Franchisee has 12 months from the Effective Date to complete the initial training as required by Section 14.1 and to commence operation of the Bakery. Franchisee must obtain Franchisor's written approval before commencing operation of the Bakery.

2. TERM AND RENEWAL

• 2.1. Initial Term. Unless terminated earlier in accordance with the terms and conditions set forth herein, this Agreement and the franchise granted hereunder shall have an initial term of 10 years commencing as of the Effective Date (the "Initial Term").
• 2.2. Renewal. Upon the expiration of the Initial Term, Franchisee shall have the right to renew the franchise granted hereunder for an additional 10 year period provided that all of the following conditions are met:
• (i) Franchisee gives Franchisor written notice of its election to renew the franchise not less than six months before the expiration of the Initial Term;
• (ii) Franchisee is not, when notice is given, and does not become before the expiration of the Initial Term, in default of any provision of this Agreement or any other agreement between Franchisee and Franchisor or its subsidiaries or affiliates or with any other creditor or supplier of the Bakery or lessor or sublessor of the Franchised Site, and Franchisee shall have fully and faithfully performed all of its obligations under this Agreement and all such other agreements throughout their terms;

Source: Item 22 — CONTRACTS (FDD pages 61–62)