Under what circumstances can the Cinnaholic franchisor seek injunctive relief?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
The parties acknowledge that the covenants contained in Section 20.1 are based on the reason and understanding that Franchisee and the Bound Parties will possess knowledge of Franchisor's business and
operating methods and confidential information, disclosure and use of which would prejudice the interest of Franchisor and its Franchisees.
Franchisee further understands and acknowledges the difficulty of ascertaining monetary damages and the irreparable harm that would result from breach of these covenants.
If any part of this restriction is found to be unreasonable in time or distance, such time or distance may be reduced by appropriate order of the court to that deemed reasonable.
Franchisor shall, as a matter of course, receive injunctive relief to enforce such covenants in addition to any other relief to which it may be entitled at law or in equity.
Franchisor shall receive such injunctive relief without the necessity of posting bond or other security, such bond or other security being hereby waived.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the franchisor can receive injunctive relief to enforce covenants related to the franchisee's knowledge of Cinnaholic's business, operating methods, and confidential information. This is due to the understanding that franchisees will possess this knowledge, and its disclosure or use would harm Cinnaholic and its franchisees. The franchisor is entitled to this injunctive relief as a matter of course, in addition to any other legal or equitable remedies available.
This means that if a franchisee breaches the covenants designed to protect Cinnaholic's confidential information, the franchisor can seek a court order to stop the franchisee from continuing the harmful actions. This is particularly important for protecting trade secrets and operational methods that give Cinnaholic a competitive advantage. Injunctive relief is a powerful tool because it can immediately halt the damaging behavior, which monetary damages alone might not adequately address.
Furthermore, Cinnaholic is entitled to receive injunctive relief without needing to post a bond or other security. Typically, when seeking an injunction, a party might be required to post a bond to cover potential damages to the other party if the injunction is later found to be unwarranted. However, in the Cinnaholic franchise agreement, this requirement is waived, making it easier and less costly for Cinnaholic to obtain an injunction to protect its interests.