Can a Corner Bakery Cafe developer advise a Competitive Business?
Corner_Bakery_Cafe Franchise · 2025 FDDAnswer from 2025 FDD Document
You will not receive an exclusive territory under the Development Agreement or the Franchise Agreement. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
As explained in Item 1, our affiliate, On Smile LLC, offers franchises for Cici's restaurants. Cici's restaurants specialize in pizza and other foods and operate either as dine-in buffet style restaurants or carry-out restaurants. The principal business address of On Smile LLC is the same as ours. Corner Bakery Cafes and Cici's restaurants currently offer significantly different menu items but they do offer some similar goods and they may offer similar goods or services in the future. There may be now or in the future Cici's restaurants located in the same market as current and future Corner Bakery Cafes. These Cici's restaurants could be company-owned, franchised or both. If there is a conflict between you and us caused by a Cici's restaurant or between a Corner Bakery Cafe franchisee and a Cici's restaurant franchisee, our management team will attempt to resolve the conflict after taking into account the specific facts of each situation and what is in the best interests of the affected system or systems. However, we are not responsible for resolving conflicts between or among Corner Bakery Cafe franchisees, or between or among a Corner Bakery Cafe franchisee and a Cici's franchisee.
Except as previously described in Item 1 and this Item 12, neither we nor any of our affiliates have established or presently intends to establish, other franchises or company-operated outlets selling or leasing similar products or services under a different trade name or trademark; however, we retain the right to do so in the future.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 43–50)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the FDD does not explicitly state whether a Corner Bakery Cafe developer can advise a competitive business. However, Item 12 discusses competition from other franchisees, company-owned outlets, other distribution channels, and competitive brands, including the franchisor's affiliate, Cici's restaurants. It states that Corner Bakery Cafe franchisees may face competition from these sources. The document outlines a process for resolving conflicts between Corner Bakery Cafe franchisees and Cici's restaurants, but the franchisor is not responsible for resolving conflicts among Corner Bakery Cafe franchisees or between a Corner Bakery Cafe franchisee and a Cici's franchisee. This suggests that while direct advising of a competitive business isn't addressed, franchisees will likely encounter competition, and internal conflicts are not the franchisor's responsibility to resolve.
The FDD emphasizes that franchisees do not receive an exclusive territory under the Development Agreement or the Franchise Agreement. This lack of exclusivity means that Corner Bakery Cafe franchisees could face competition from various sources, including other franchisees and competitive brands. The document also mentions that Corner Bakery Cafes and Cici's restaurants, both under the same parent company, may offer similar goods or services in the future and could be located in the same market. This highlights the potential for competition even within the franchisor's affiliated brands.
Given the lack of explicit restrictions on advising a competitive business, and the acknowledgement of potential conflicts and competitive situations, prospective Corner Bakery Cafe developers should seek clarification from the franchisor regarding any specific policies on this matter. Understanding the franchisor's stance on franchisees providing advice or services to competing businesses is crucial for making an informed decision and avoiding potential conflicts of interest.