What happens if a Cinnaholic franchisee breaches Section 20 of the agreement?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
- (xiii) Franchisee or any Bound Party or any other employee of Franchisee breaches or fails to comply fully with Section 20 above;
Franchisee further understands and acknowledges the difficulty of ascertaining monetary damages and the irreparable harm that would result from breach of these covenants.
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.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, if a franchisee or any Bound Party or employee breaches or fails to comply fully with Section 20 of the agreement, it constitutes grounds for termination of the franchise agreement. Section 20 includes covenants related to non-competition, non-solicitation of employees, and the use and protection of trade secrets and confidential information. These provisions are designed to protect Cinnaholic's brand, system, and confidential business information.
Cinnaholic emphasizes the importance of these covenants, stating that they are reasonable and necessary to protect the Cinnaholic system, other franchisees, and the franchisor's legitimate interests. The FDD also acknowledges the difficulty of calculating monetary damages resulting from a breach of these covenants and recognizes the potential for irreparable harm.
To enforce these covenants, Cinnaholic is entitled to injunctive relief, meaning a court order that would compel the franchisee to stop the violating behavior. This injunctive relief can be obtained without Cinnaholic needing to post a bond or other security. In addition to injunctive relief, Cinnaholic is entitled to any other legal or equitable remedies available. This could include monetary damages to compensate for any losses suffered as a result of the breach.