What happens to the post-termination obligations of the Cinnaholic Developer if the Developer terminates the agreement?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event of termination by Developer, all post-termination obligations of Developer described herein shall not be waived but shall be strictly adhered to by Developer.
Upon the termination or expiration of this Agreement, Developer shall also undertake the following: (i) strictly comply with the post-termination/post-expiration covenant not to compete set forth herein; and (ii) continue to abide by those restrictions pertaining to the use of Franchisor's confidential information and proprietary information as set forth herein.
The expiration and termination of this Agreement will be without prejudice to the rights of the Franchisor against Developer and the expiration or termination will not relieve Developer of any of its obligations to Franchisor existing at the time of such expiration or termination, or terminate those obligations of the Developer which by their nature survive the expiration or termination of this Agreement.
Source: Item 23 — RECEIPT (FDD pages 62–269)
What This Means (2025 FDD)
According to the 2025 Cinnaholic Franchise Disclosure Document, if the Developer terminates the Market Development Agreement, all post-termination obligations of the Developer are not waived and must be strictly adhered to by the Developer.
Specifically, upon termination or expiration of the agreement, the Developer must strictly comply with the post-termination/post-expiration covenant not to compete. The Developer must also continue to abide by the restrictions pertaining to the use of Cinnaholic's confidential and proprietary information. These obligations survive the termination of the agreement.
These post-termination obligations are typical in franchising to protect the brand and trade secrets of Cinnaholic. The non-compete agreement prevents the Developer from using the knowledge and experience gained from the Cinnaholic system to directly compete with the franchise after the agreement ends. The restrictions on confidential information prevent the unauthorized disclosure or use of Cinnaholic's proprietary information, which could harm the brand's competitive advantage.