For Cinnaholic, are the rights granted under the franchise agreement considered cumulative?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
Developer acknowledges and agrees that by virtue of this Agreement and the Area of Responsibility, Developer does not have exclusive territorial rights, protected territory, or other rights to exclude, control or impose conditions on the location or development of other or future CINNAHOLIC® Bakeries or on Franchisor's activities, except as may be provided in an applicable Franchise Agreement.
- 2.2.
Reservation of Rights.
Franchisor retains the right, in its sole discretion, to:
(i) establish and operate, and grant to other franchisees or licensees the right to establish and operate, a CINNAHOLIC® Bakery or any other business using the name "CINNAHOLIC®" and all other trade names, trademarks, service marks, commercial symbols, logos, emblems, signs, slogans and insignia developed for use with the CINNAHOLIC System from time to time (collectively, the "Marks"), the CINNAHOLIC® System or any variation of the Marks or the CINNAHOLIC® System, in any location (including inside the Area of Responsibility) and on any terms and conditions that Franchisor deems appropriate;
(ii) develop, use and franchise anywhere the rights to any trade names, trademarks, service marks, commercial symbols, logos, emblems, signs, slogans, insignia, patents or copyrights not designated by Franchisor as Marks, for use with similar or different franchise systems for the sale of similar or different products or services than those constituting a part of the CINNAHOLIC® System, without granting Developer any rights therein;
(iii) offer, ship, sell and provide products or services identified by the Marks or other trademarks, service marks, commercial symbols or emblems to customers located anywhere through any distribution channel or method, including grocery stores, convenience stores, the Internet (or any other existing or future form of electronic commerce), and delivery services within and outside the Area of Responsibility, irrespective of the proximity to any Bakery established hereunder without compensation to Developer;
(iv) own, operate, franchise or license anywhere, even in close proximity to any Bakeries developed hereunder, Bakeries of any other type whatsoever operating under marks other than the Marks; and
(v) engage in any other activity, action or undertaking that Franchisor is not expressly prohibited from taking under this Agreement.
Source: Item 23 — RECEIPT (FDD pages 62–269)
What This Means (2025 FDD)
According to the 2025 Cinnaholic Franchise Disclosure Document, the rights granted to a developer under the Development Agreement are not cumulative in the traditional sense of granting exclusive territorial rights. Instead, Cinnaholic retains significant rights to operate and franchise other locations, even within the developer's Area of Responsibility. The developer's rights are limited to establishing and operating a specified number of Cinnaholic bakeries within a non-exclusive area, subject to Cinnaholic's approval of the location.
Cinnaholic explicitly reserves the right to establish and operate, or grant to others the right to establish and operate, Cinnaholic bakeries or any other business using the Cinnaholic name and trademarks in any location, including within the developer's Area of Responsibility. This reservation of rights extends to various distribution channels, including grocery stores, the internet, and delivery services, without any obligation to compensate the developer. Cinnaholic can also operate other bakery types under different marks, even in close proximity to the developer's locations.
This arrangement means that a Cinnaholic developer does not have exclusive territorial protection and cannot prevent Cinnaholic from franchising or operating competing locations or alternative distribution channels within their area. The developer's rights are contingent upon entering into individual Franchise Agreements for each bakery, and until such an agreement is in place, the developer cannot exercise any rights associated with the Cinnaholic system or trademarks. This lack of cumulative rights and territorial protection is a significant consideration for prospective developers, as it introduces the potential for direct competition from Cinnaholic or other franchisees within their designated area.