For Cinnaholic, who is included in the definition of 'Bound Party'?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
and in any event upon termination or expiration of this Agreement, Franchisee will immediately return any copies of documents where there are materials containing confidential information and will take appropriate steps to permanently delete and render unusable any confidential information stored electronically.
- 20.4. Personal Covenants of Certain Bound Parties. As a condition to the effectiveness of this Agreement, and at the time Franchisee delivers this signed Agreement to Franchisor, each Bound Party of Franchisee must sign and deliver to Franchisor the Personal Covenants attached hereto as Exhibit B (the "Personal Covenants"), agreeing to be bound personally by all the provisions of Sections 20.1, 20.2 and 20.3 hereof. If there are any changes in the identity of any such Bound Party while this Agreement is in effect, Franchisee must notify Franchisor promptly and make sure the new Bound Party signs and delivers to Franchisor the Personal Covenants.
- 20.5. Agreements by Other Third Parties. As a condition to Franchisor's execution of this Agreement, Franchisee, if requested by Franchisor, shall cause each of its management and supervisory employees and other employees to whom disclosures of confidential information are made to execute a noncompetition, nonsolicitation and/or nondisclosure agreement in the form(s) prescribed by Franchisor from time to time.
- 20.6. Reasonable Restrictive Covenants. Franchisee acknowledges and agrees that (i) the covenants and restrictions in this Section 20 are reasonable, appropriate and necessary to protect the CINNAHOLIC® System, other CINNAHOLIC® franchisees and the legitimate interest of the Franchisor, and (ii) do not cause undue hardship on Franchisee or any of the other individuals required by this Section 20 to comply with the covenants and restrictions.
21. TERMINATION
- 21.1. Termination by Franchisee.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Cinnaholic requires each 'Bound Party' of the franchisee to sign and deliver the Personal Covenants agreement. This agreement makes them personally bound by the provisions related to non-competition, non-solicitation, and trade secrets/confidential information. If there are any changes to the identity of a Bound Party, the franchisee must promptly notify Cinnaholic and ensure the new Bound Party signs and delivers the Personal Covenants.
'Bound Parties' are also subject to certain restrictions. They are prohibited from soliciting Cinnaholic employees or those of other Cinnaholic franchisees during the term of the franchise agreement and for one year after its expiration or termination. They must also protect Cinnaholic's confidential information during the agreement's term and for five years after termination, or indefinitely if the information constitutes a trade secret.
These measures are in place to protect Cinnaholic's business interests, trade secrets, and franchise network. The FDD states that these restrictions are considered reasonable and necessary to protect the Cinnaholic system and other franchisees. Franchisees should carefully consider who their Bound Parties are, as these individuals will be subject to legally binding obligations.