For Cinnaholic, do I understand that another franchise or company-owned bakery may open outside my limited protected territory?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
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 establishing other bakeries. Cinnaholic has the right to establish and operate, or grant to other franchisees or licensees the right to establish and operate, a Cinnaholic Bakery or any other business using Cinnaholic's marks and system in any location outside the Franchise Territory. These can be on any terms and conditions that Cinnaholic deems appropriate. This means that while you may have a protected territory, Cinnaholic is not restricted from opening other locations outside of it, which could potentially impact your business if those locations are nearby.
Cinnaholic also has the right to 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 as Cinnaholic's Marks. They can use these for 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 the franchisee any rights therein. This means Cinnaholic could introduce new brands or systems that operate alongside Cinnaholic, even within your territory.
Furthermore, Cinnaholic can offer, ship, sell, and provide products or services identified by the Marks 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. Cinnaholic also retains the right to 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. These rights allow Cinnaholic to explore alternative distribution methods and locations, potentially competing with your bakery. Cinnaholic can also operate bakeries of any other type whatsoever operating under marks other than the Marks, even in close proximity to the Bakery licensed.
As a Cinnaholic franchisee, it is important to understand that the grant of a franchise does not guarantee exclusive rights beyond the specific protected territory. Cinnaholic retains considerable freedom to operate and license other businesses, brands, and distribution channels, even if they compete with your location. Prospective franchisees should carefully consider the potential impact of these retained rights on their investment and discuss any concerns with Cinnaholic before signing the franchise agreement.