For Cinnaholic, do I understand that the franchisor and its affiliates retain certain rights?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
e has no territorial protection and Franchisee has no right to exclude, control or impose conditions on the location or development of other or future franchises under the Marks, or on any sales or distribution of products under the Marks or other business activities of Franchisor or any other party licensed to use the Marks.
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.
- 3.4. Catering and Delivery Services. Franchisor acknowledges and agrees that Franchisee may provide catering and delivery services within a reasonable distance from the Franchised Site not to exceed 10 miles, within or without the Franchise Territory, but solely in connection with providing such catering and delivery services and provided such services are made by ground transportation.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to the 2025 Cinnaholic Franchise Disclosure Document, Cinnaholic Franchising, LLC retains specific rights regarding the brand and its operation. Cinnaholic reserves the right to establish and operate Cinnaholic bakeries, or grant others the right to do so, outside of a franchisee's territory. They can also develop and franchise other systems using similar or different products or services, even within a franchisee's territory, without granting the franchisee any rights to those systems.
Cinnaholic also retains the right to sell products and services identified by their trademarks through various channels, including grocery stores, the internet, and delivery services, even within a franchisee's territory, without compensating the franchisee, as long as these sales do not originate from another Cinnaholic bakery within that territory. Furthermore, Cinnaholic can operate or license franchises at destination locations like airports, stadiums, schools, hospitals, malls, and food courts, even if these are within a franchisee's territory.
Additionally, Cinnaholic has the right to operate or franchise other types of bakeries under different marks, even in close proximity to an existing Cinnaholic bakery. They can also engage in any activity not expressly prohibited by the franchise agreement. Cinnaholic can also assign the agreement to others and may sell the company, its assets, the trademarks, or the Cinnaholic system to a third party, go public, engage in private placements, merge with or acquire other corporations, or undergo financial restructuring.
These retained rights allow Cinnaholic to maintain flexibility in expanding the brand through various channels and locations, which could potentially impact a franchisee's market. A prospective franchisee should consider these rights and how they might affect their business before investing in a Cinnaholic franchise.