According to the Cinnabon Franchise Agreement, where will binding arbitration occur?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
Except for disputes related to (i) the ownership or validity of any of Lessor's intellectual property, including SRU designs and Modifications; (ii) disputes that involve enforcement of Lessor's intellectual property rights or protection of Lessor's confidential information or trade secrets; or (iii) disputes related to the payment of sums Lessee owes to Lessor or its affiliates (collectively, "Excepted Disputes"), all disputes between Lessee, its affiliates, and Lessee's and/or its affiliates' owners, officers, directors and employees, on the one hand, and Lessor, its affiliates, and/or Lessor's or its affiliates' owners, officers, directors and employees, on the other hand, relating to this Agreement, Lessor's relationship with Lessee, or the SRU, will be resolved by binding arbitration in accordance with the procedures described in Section 19.1 of the Franchise Agreement.
Excepted Disputes will not be resolved through arbitration unless Lessor consents to arbitration.
Excepted Disputes will be filed exclusively in any court of general jurisdiction in Fulton County, Georgia, in the United States District Court of the
Northern District of Georgia, or such other court where Lessor has its principal place of business at the time of filing, and Lessee irrevocably consents to such court's jurisdiction over it.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to the 2025 Cinnabon Franchise Disclosure Document, disputes will be resolved through binding arbitration. However, there are exceptions to this rule. Disputes related to the ownership or validity of Cinnabon's intellectual property, enforcement of intellectual property rights, protection of confidential information or trade secrets, or the payment of sums owed to Cinnabon or its affiliates will not be resolved through arbitration unless Cinnabon consents to it.
For disputes that do proceed to arbitration, the FDD does not specify the exact location where arbitration will occur. However, for Excepted Disputes that are not subject to arbitration, the document states that these will be filed exclusively in any court of general jurisdiction in Fulton County, Georgia, in the United States District Court of the Northern District of Georgia, or such other court where Cinnabon has its principal place of business at the time of filing. The franchisee irrevocably consents to such court's jurisdiction over it.
Prospective Cinnabon franchisees should note that the location of arbitration can be a significant factor, as it can impact travel costs and the convenience of legal proceedings. It is advisable to seek clarification from Cinnabon regarding the typical location for arbitration proceedings and to consider negotiating terms that are favorable to both parties.
It is also important for prospective franchisees to understand the types of disputes that are subject to arbitration versus those that may be pursued in court, as this can affect the legal strategies and costs associated with resolving conflicts. Understanding these provisions is crucial for making an informed decision about investing in a Cinnabon franchise.