After termination or expiration of the Cinnaholic agreement, what is the geographic radius within which Bound Parties are restricted from having an interest in a Competitive Business?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
rm of this Agreement (a) have any direct or indirect interest as a disclosed or beneficial owner in a Competitive Business (as defined below), regardless of location or (b) perform services as a director, officer, manager, employee, consultant, representative, agent, or otherwise for a Competitive Business, regardless of location.
- (ii) Post-Term Non-Competition. In addition to and not in limitation of any other restrictions on Franchisee contained herein, Franchisee and the Bound Parties agree that they will not, for one year following the effective date of termination or expiration of this Agreement for any reason, or following the date of a Transfer by Franchisee, directly or indirectly, for and on behalf of itself, himself, herself or any other person or entity, (a) have any direct or indirect interest as a disclosed or beneficial owner in a Competitive Business or (b) perform services as a director, officer, manager, employee, consultant, representative, agent, or otherwise for a Competitive Business which, in either case, is located or operating within a five mile radius of any CINNAHOLIC® Bakery.
- (iii) General.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, franchisees and other Bound Parties are subject to a post-term non-compete agreement. This agreement restricts them from having a direct or indirect interest in a Competitive Business, or performing services for one, within a specific geographic area. This restriction applies for one year following the termination or expiration of the Franchise Agreement.
The geographic scope of this restriction is defined as a five-mile radius of any Cinnaholic Bakery. This means that for one year after leaving the Cinnaholic system, a former franchisee cannot be involved with a competing bakery business within five miles of any existing Cinnaholic location.
The term "Competitive Business" is defined as any business operating a bakery or food service that derives more than 50% of its revenue from cinnamon rolls. This definition is important because it clarifies the types of businesses that the non-compete agreement applies to, specifically targeting businesses that directly compete with Cinnaholic's core product offering.