If the Cinnaholic Developer terminates the agreement, are they still required to adhere to post-termination obligations?
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 expiration or termination of this Agreement for any reason, any and all rights granted to Developer hereunder shall be extinguished immediately, and Developer shall not be relieved of any of its obligations, debts or liabilities hereunder.
All rights and licenses granted to Developer hereunder to develop Bakeries shall revert to the Franchisor and the Franchisor shall have the right to develop, or license others to develop, Bakeries.
Developer shall have no further rights to develop further Bakeries and Developer shall immediately cease all use of the Marks, except as permitted under the terms of a fully executed Franchise Agreement, which is in effect at the time of the termination or expiration.
With respect to such then-effective Franchise Agreements, Developer shall retain its interest as a franchisee thereunder, provided that Developer is not in default under such Franchise Agreements.
Developer shall pay all sums due to Franchisor or its affiliates.
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 Cinnaholic's 2025 Franchise Disclosure Document, if the Developer terminates the agreement, they are still required to adhere to all post-termination obligations. Specifically, if the Developer terminates the agreement due to Cinnaholic's material breach, the Developer must still adhere to all post-termination obligations.
Upon termination or expiration of the Development Agreement, all rights granted to the Developer are immediately extinguished, but the Developer remains responsible for all outstanding obligations, debts, and liabilities. All rights to develop bakeries revert back to Cinnaholic, who can then develop or license others to develop bakeries in the territory. The developer must immediately stop using Cinnaholic's marks, except as allowed under any fully executed and действующий Franchise Agreements.
Specifically, the Developer must comply with the post-termination covenant not to compete and continue to protect Cinnaholic's confidential and proprietary information. These obligations survive the termination or expiration of the Development Agreement. The termination does not affect Cinnaholic's rights against the Developer, nor does it relieve the Developer of obligations existing at the time of termination.