Under the Cinnaholic Development Agreement, is the location of future units determined by the franchisor?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
The Development Agreement will specify an Area of Responsibility within which you will focus your development efforts. Under the Development Agreement, you are not granted a territory, exclusive or otherwise, within which to develop your Bakery(s). Under the Development Agreement, we will determine or approve the location of future units and any territories for those units, and the then-current standards for sites and territories will apply. You may establish a Bakery at any location within your Area of Responsibility provided that we consent to the location, which may be granted or withheld in our sole discretion, the location is in a state where we are permitted to sell CINNAHOLIC® franchises, and the location is not located in another franchisee's franchise territory or area of responsibility. We will notify you of those areas which have been assigned to franchisees, either as exclusive territories or areas of responsibility. We do not intend to grant a large number of franchise territories, although we intend to grant other franchisees areas of responsibility within which they will concentrate their development efforts. An area of responsibility is a geographic territory within which we expect you to concentrate your development efforts. You will have no exclusive territorial rights, protected territory or other rights to exclude, control or impose conditions on the location or development of other or future franchises under the Marks or on our activities, except as may be provided in an applicable Franchise Agreement. If you fail to meet your development schedule, we may terminate your Development Agreement.
Source: Item 12 — TERRITORY (FDD pages 36–37)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, under the Development Agreement, Cinnaholic retains the authority to determine or approve the location of future units. While the Development Agreement specifies an Area of Responsibility where the developer should focus their efforts, it does not grant any exclusive territory.
A prospective Cinnaholic developer can propose locations within their Area of Responsibility, but Cinnaholic has the sole discretion to either consent to or withhold approval of the location. Cinnaholic will also ensure that the location is in a state where they are permitted to sell franchises and that it does not encroach upon another franchisee's territory or area of responsibility. Cinnaholic will notify developers of areas already assigned to franchisees.
This arrangement means that while developers can suggest locations, Cinnaholic maintains control over where new units are established. This allows Cinnaholic to manage market saturation and ensure strategic placement of its bakeries. However, it also means that developers may not have the final say in where they can build their units, which could potentially lead to delays or disagreements over site selection. It is important to note that failure to meet the development schedule agreed upon in the Development Agreement may result in termination of the agreement.