Does Cinnaholic grant territorial protection to the franchisee?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3.2. Territorial Protection. Franchisor will not establish for itself or grant a franchise to any other party to establish a Bakery within the territory specified on Exhibit A attached hereto (the "Franchise Territory"). Notwithstanding anything herein to the contrary, if any disagreement arises regarding the area comprising the Franchise Territory, then Franchisor's decision as to the definition of the Franchise Territory shall be final and binding. Except as expressly provided in the first sentence of this Section 3.2, Franchisee acknowledges that the franchise granted under this Agreement is non-exclusive and Franchisee has no territorial protection and Franchisee has no right to exclude, control or impose conditions on the location or development of other or future franchises under the Marks, or on any sales or distribution of products under the Marks or other business activities of Franchisor or any other party licensed to use the Marks.
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 are non-exclusive, applying only to the operation of a single Cinnaholic bakery at a specific location. While Cinnaholic states it will not establish a franchise to another party within the territory specified in Exhibit A, the agreement also stipulates that if any disagreement arises regarding the area comprising the Franchise Territory, then Cinnaholic's decision is final and binding.
However, the franchise agreement emphasizes the non-exclusive nature of the franchise, stating that franchisees have no right to exclude, control, or impose conditions on other franchises or business activities of Cinnaholic or its licensees. Cinnaholic retains the right to operate or franchise other Cinnaholic bakeries or any other business using the Cinnaholic system outside the Franchise Territory.
Furthermore, Cinnaholic reserves the right to sell products or services identified by its trademarks within the Franchise Territory through various distribution channels, including grocery stores, the Internet, and delivery services, without compensating the franchisee, as long as these sales do not originate from another Cinnaholic bakery within the territory. Cinnaholic can also establish franchises at destination locations like airports, stadiums, schools, malls, and hospitals, even within the franchisee's territory.