What is the agreement of each person having equity interest in the Cinnabon franchisee regarding Section 15 of the Franchise Agreement?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
Each of the undersigned ("you") agrees that:
As an inducement to us to enter into the Franchise Agreement, and in consideration of the direct and personal benefits you will derive from the Franchise Agreement, you agree that: (i) you have read and understand all the provisions of Section 15 (Confidential Information; Restrictive Covenants) of the Franchise Agreement; (ii) you will be personally bound by all of the obligations and covenants of Franchisee in Section 15 of the Franchise Agreement as if the obligations and covenants were made and given personally by you directly to us; and (iii) the obligations and covenants are fair and reasonable and will not deprive you of your livelihood.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to the 2025 Cinnabon Franchise Disclosure Document, all individuals holding an equity interest in a Cinnabon franchise must sign the "Personal Covenants" outlined in Schedule B. By signing these covenants, each equity holder agrees to be personally bound by the obligations and restrictions detailed in Section 15 of the Franchise Agreement, which pertains to confidential information and restrictive covenants. This means that these individuals are legally responsible for upholding the confidentiality and non-compete terms as if they were directly a party to the agreement with Cinnabon.
This requirement is put in place to ensure that all those who benefit financially from the Cinnabon franchise are equally committed to protecting Cinnabon's proprietary information and adhering to the non-compete agreements. This is particularly important in the franchise industry, where brand consistency and protection of trade secrets are vital for the success of the entire system.
Furthermore, the document states that by signing the Personal Covenants, the equity holders acknowledge that they have read and understood Section 15 of the Franchise Agreement and that the obligations and covenants within are fair, reasonable, and will not deprive them of their livelihood. This acknowledgement is intended to prevent future disputes regarding the enforceability of these provisions, as the equity holders have already affirmed their understanding and acceptance of the terms. Cinnabon aims to ensure that all parties involved are fully aware of their responsibilities and the implications of the Franchise Agreement.