What sections of the Cinnaholic Development Agreement and Exhibit A cover territorial development and sales quotas?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
g custom gourmet cinnamon rolls and other food products and beverages and related bakery services under the name "CINNAHOLIC®" ("CINNAHOLIC® Bakeries" or "Bakeries") ("the CINNAHOLIC® System"). Developer has applied to Franchisor for, and Franchisor desires to grant to Developer, the right to establish and operate a specified number of CINNAHOLIC® Bakeries in accordance with a specified development schedule, all in accordance with the terms and conditions contained herein.
1. GRANT OF DEVELOPMENT RIGHTS
During the term of this Agreement, Franchisor hereby grants to Developer, subject to the terms and conditions contained herein, the right to establish and operate the number of CINNAHOLIC® Bakeries set forth on the development schedule (the "Development Schedule") attached hereto as Exhibit A. Each CINNAHOLIC® Bakery to be established hereunder shall be located in the non-exclusive area described in Exhibit A (the "Area of Responsibility"). Within Franchisor's discretion, Franchisor may consider sites proposed by Developer outside the Area of Responsibility which will count toward the Development Schedule if approved by Franchisor. The operation of any CINNAHOLIC® Bakery established pursuant to this Agreement shall be governed by an individual CINNAHOLIC® Franchising Limited Liability Company. Franchise Agreement to be entered into between Franchisor and Developer in accordance with Section 10 below (each, a "Franchise Agreement").
2. TERRITORIAL PROTECTION AND RESERVATION OF RIGHTS
- 2.1. No Territorial Protection. Developer may establish the Bakeries required to be developed hereunder at any location within the Area of Responsibility provided that Franchisor, in its sole discretion, consents in writing to the location, the location is in a state where Franchisor is permitted to sell CINNAHOLIC® franchises, and the location is not located in a territory in which any other CINNAHOLIC® franchisee has exclusive rights or a right of first refusal.
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 26–27)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the Development Agreement and Exhibit A outline the development schedule and area of responsibility for establishing Cinnaholic bakeries. Specifically, the Development Agreement grants the developer the right to establish and operate a specified number of Cinnaholic bakeries according to the development schedule outlined in Exhibit A. These bakeries are to be located within a non-exclusive area of responsibility, also detailed in Exhibit A. However, Cinnaholic retains significant rights, including the ability to establish other Cinnaholic bakeries or businesses, even within the developer's area of responsibility.
Notably, the Development Agreement does not grant exclusive territorial rights, meaning a developer cannot exclude or control the development of other Cinnaholic franchises or the activities of Cinnaholic itself. Cinnaholic reserves the right to operate or franchise bakeries anywhere, including within the area of responsibility, and to sell products through various channels without compensating the developer. This lack of territorial protection is a critical point for potential developers to consider.
Furthermore, the continuation of the Franchise Territory during the term of the Franchise Agreement does not depend on a certain sales or revenue volume or market penetration. This means that Cinnaholic franchisees are not subject to sales quotas to maintain their territory.