If a Cinnaholic developer breaches Section 14 of the Development Agreement, can Cinnaholic terminate the Development Agreement?

According to the 2025 Cinnaholic Franchise Disclosure Document, Cinnaholic can terminate the Development Agreement if the developer or any Bound Party breaches or fails to comply fully with Section 14 of the agreement. Section 14 outlines restrictive covenants, including non-compete agreements during and after the term of the agreement.

Section 14.4 also states that as a condition to the effectiveness of the Development Agreement, each Bound Party of the Developer must sign and deliver to Cinnaholic the Personal Covenants attached as Exhibit C, agreeing to be personally bound by the provisions of Sections 14.1, 14.2, and 14.3. If there are any changes in the identity of any such Bound Party while the agreement is in effect, the developer must notify Cinnaholic promptly and ensure the new Bound Party signs and delivers the Personal Covenants.

This means that if a developer or a Bound Party violates the non-compete clauses or other restrictive covenants outlined in Section 14, Cinnaholic has the right to terminate the Development Agreement immediately. This is a significant point for prospective developers to consider, as strict adherence to these covenants is required to maintain the agreement and continue developing Cinnaholic bakeries.