Are there any exceptions to Cinnaholic's right of first refusal?
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)
According to Cinnaholic's 2025 Franchise Disclosure Document, Cinnaholic retains specific rights regarding the operation of Cinnaholic bakeries and the use of its trademarks, which could be considered exceptions to a franchisee's right of first refusal.
Cinnaholic reserves the right to establish and operate Cinnaholic bakeries, or grant others the right to do so, outside the franchisee's territory. They can also develop and franchise other systems using trademarks not designated as Cinnaholic's marks, even within the franchisee's territory. This means Cinnaholic could introduce similar or different businesses under different brands within the franchisee's area.
Furthermore, Cinnaholic can sell products or services identified by their trademarks to customers within the franchisee's territory through various channels like grocery stores, internet, and delivery services, without compensating the franchisee, as long as these sales do not originate from a Cinnaholic bakery within the territory. Cinnaholic also retains the right to establish franchises at destination locations such as airports, stadiums, schools, universities, hospitals, malls, and shopping centers, even if these are within the franchisee's territory. They can also operate other types of bakeries under different marks, even in close proximity to the licensed bakery.
These reservations grant Cinnaholic significant flexibility in expanding its brand and exploring alternative distribution channels, which could impact a franchisee's market share and revenue potential. A prospective franchisee should carefully consider these potential competitive scenarios within their territory.