After termination or expiration of the Cinnaholic agreement, what is the geographic radius within which Bound Parties are restricted from performing services for 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, after the termination or expiration of the franchise agreement, a franchisee and other Bound Parties are restricted from involvement with a Competitive Business within a specific geographic radius. This restriction lasts for one year following the termination, expiration, or transfer of the franchise.
The non-compete clause specifies that Bound Parties cannot have a direct or indirect interest in, or perform services for, a Competitive Business. This includes roles such as director, officer, manager, employee, consultant, representative, or agent. The geographic scope of this restriction is limited to a five-mile radius of any Cinnaholic Bakery.
A Competitive Business is defined as any business that operates a bakery or food service, either through retail or wholesale, that generates more than 50% of its revenue from cinnamon rolls. This definition excludes other Cinnaholic Bakeries operated under a franchise from Cinnaholic. This restriction is designed to protect Cinnaholic's market and confidential information, ensuring that former franchisees do not use their knowledge to compete unfairly within a close proximity to existing Cinnaholic locations.