Can Cinnabon or its affiliates establish franchises or company-owned businesses offering similar products near a Cinnabon franchisee's location?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
specified in Section 10.1.E. (Local Marketing Obligation)) shall
not exceed 5% of the Net Sales of the Franchised Business, payable each week on the Net Sales of the Franchised Business for the preceding week (or on any other basis stated in the Manuals or in our written notice to you). We and the Co-Branded Franchisor will jointly collect the Advertising Contribution from you based on the Net Sales of the entire Co-Branded Franchise.
- Section 4.1 (Reserved Rights): The following provisions are added to Section 4.1 of the Agreement.
[For Streetside Locations:]
A. Area of Protection. We grant you a protected territory in which you have certain limited exclusive rights (an "Area of Protection"). [Your Area of Protection is: a _.__ mile [OR block] radius from the Accepted Location with the Accepted Location as the center point.] [OR] [We will designate, in our sole discretion, your Area of Protection after we accept the Proposed Location as the Accepted Location. When we designate the Area of Protection for the Franchised Business, you must sign standard documentation we prepare, which includes a general release, to document the Area of Protection.] If you relocate the Franchised Business pursuant to Section 5.5 (Relocation of the Franchised Business), we will specify an Area of Protection for the new location.
B. Protected Rights. During the Term, we will not establish or operate, nor license any other person to establish or operate, a Swirl Business at a Streetside Location within the Area of Protection. "Streetside Locations" include freestanding, inline, and endcap locations on city streets or in shopping centers (including power centers, lifestyle centers, and strip centers, but excluding malls (enclosed and open air) and outlet malls and centers).
C. Other Locations. "Other Locations" include all locations other than Streetside Locations, including airports, amusement parks, big box stores, casinos, colleges, convenience stores, farmer's markets, military bases, malls (enclosed and open air), outlet malls and centers, sports and entertainment venues, train stations, transportation centers, travel plazas, truck stops, universities, zoos, and Delivery Kitchens. "Delivery Kitchens" include kitchens devoted to the preparation of products or Approved Products (often referred to as ghost, dark, or cloud kitchens), which may use the Marks and may deliver to customers located anywhere.
D. Our Reserved Rights. We and our affiliates reserve all rights that we do not expressly grant you in this Agreement. For example, without limitation, we and our affiliates have the following rights, without providing any rights or compensation to you:
- (i) We and/or our affiliates may establish or license franchises and/or company-owned businesses offering products or services that are similar or identical to the Approved Products using the System or elements of the System under the Marks or any other marks (a) anywhere outside of the Area of Protection, (b) in Other Locations inside or outside the Area of Protection, or (c) in businesses other than Swirl Businesses inside or outside the Area of Protection (including businesses that are co-branded with both the Carvel® and Cinnabon® brands).
(ii) We and/or our affiliates may produce and/or sell Approved Products or any other products or services, and authorize others to produce and/or sell Approved Products or any other products or services, using the Marks, the System, and any other marks and/or systems we desire through any alternative channel of distribution located anywhere, including to and through (a) supermarkets, convenience stores, club stores, and other retail facilities not dedicated to the sale of the Approved Products, (b) mail order and e-commerce channels, and (c) Delivery Kitchens.
(iii) We and/or our affiliates may advertise, or authorize others to advertise, using the Marks anywhere, including inside and outside any Area of Protection.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, the extent to which Cinnabon or its affiliates can establish similar businesses near a franchisee's location depends on the type of location and whether it falls within the Area of Protection. For Streetside Locations (freestanding, inline, and endcap locations on city streets or in shopping centers, excluding malls and outlet malls), Cinnabon will not establish or operate, nor license others to do so, a Swirl Business within the Area of Protection during the franchise term. The Area of Protection is designated by Cinnabon, and its size (mile or block radius) is specified in the Franchise Agreement.
However, Cinnabon and its affiliates retain significant rights outside of this protected area. They can establish or license franchises and/or company-owned businesses offering similar products or services under the Cinnabon brand or other brands in Other Locations, even if those locations are inside the Area of Protection. Other Locations include airports, amusement parks, big box stores, casinos, colleges, convenience stores, farmer's markets, military bases, malls (enclosed and open air), outlet malls and centers, sports and entertainment venues, train stations, transportation centers, travel plazas, truck stops, universities, zoos, and Delivery Kitchens. They also reserve the right to operate businesses other than Swirl Businesses inside or outside the Area of Protection, including co-branded businesses with Carvel.
Furthermore, Cinnabon and its affiliates can produce and sell Approved Products through alternative channels of distribution located anywhere, including supermarkets, convenience stores, club stores, mail order, e-commerce, and Delivery Kitchens. They can also advertise anywhere, including inside and outside the Area of Protection. Cinnabon also retains the right to acquire or merge with other entities that have similar or competitive businesses, and they can convert these businesses to Cinnabon franchises (except for Swirl Businesses inside the franchisee's Area of Protection) or allow them to operate under another name.
It's important to note that Cinnabon, its affiliates, and other franchisees may solicit and service customers from any geographic location, including within a franchisee's Area of Protection, and may provide Catering Services and Delivery Services within that area. Additionally, Cinnabon has the right to modify or eliminate a franchisee's Area of Protection if the franchisee defaults on the agreement and Cinnabon chooses not to terminate the agreement. This extensive reservation of rights by Cinnabon means that while a franchisee has some protection for Streetside Locations, Cinnabon retains considerable freedom to operate or license competing businesses in various other venues and through different channels, even within the vicinity of a franchised location.