Are the rights granted under the Cinnaholic franchise agreement considered cumulative for both the franchisor and the franchisee?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
3.3. 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 Marks, the CINNAHOLIC® System or any variation of the Marks and the CINNAHOLIC® System, in any location outside the Franchise Territory, on any terms and conditions that Franchisor deems appropriate;
(ii) Develop, use and franchise anywhere (including within the Franchise Territory) the rights to any trade names, trademarks, service marks, commercial symbols, 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 Franchisee 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 in the Franchise Territory through any distribution channel or method, including grocery stores, convenience stores, Internet (or any other existing or future form of electronic commerce), and delivery services, irrespective of the proximity to the Bakery without compensation to Franchisee; provided, however, that any such sales will not be made from a CINNAHOLIC® Bakery located in the Franchise Territory;
(iv) Own, acquire, establish and/or operate and license to others to establish and operate CINNAHOLIC® Franchises at destination locations which may be within the Territory, including but not limited to airports, stadiums, schools, and universities, hospitals, malls, shopping center food courts, or kiosks at any such facility;
(v) Own, operate, franchise or license anywhere, even in close proximity to the Bakery licensed hereunder, bakeries of any other type whatsoever operating under marks other than the Marks; and
(vi) Engage in any other activity, action or undertaking that Franchisor is not expressly prohibited from taking under this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
Based on the 2025 Cinnaholic Franchise Disclosure Document, the rights granted to the franchisee are not cumulative. Cinnaholic retains specific rights that can impact a franchisee's operations.
Specifically, Cinnaholic retains the right to establish and operate Cinnaholic bakeries or other businesses using the Cinnaholic system outside the franchisee's territory. They can also develop and franchise other trademarks not designated as Cinnaholic marks, even within the franchisee's territory. Cinnaholic can sell products and services identified by their marks through various channels like grocery stores or the internet, even to customers within the franchisee's territory, as long as these sales do not originate from another Cinnaholic bakery in that territory. Additionally, Cinnaholic can operate franchises at destination locations like airports or universities, potentially within the franchisee's territory.
These stipulations mean that while a Cinnaholic franchisee is granted the right to operate a bakery at a specific location, Cinnaholic maintains considerable control and the ability to engage in activities that could compete with or otherwise affect the franchisee's business. A prospective franchisee should carefully consider these reserved rights and their potential impact on their investment before entering into a franchise agreement with Cinnaholic.