Where must arbitration or lawsuits be conducted for Cinnabon franchise disputes?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provisions | Section in Franchise Agreement | Summary |
|---|---|---|
| o. You must comply with our right of first refusal. p. If you operate a Co-Branded Bakery, the Co-Branded Agreement or Co-Branded Franchise are transferred at the same time. | ||
| FA: 16.4 (non-control transfers) | a. You give us prior written notice of the transfer. b. You pay all sums owed. c. You are not in default d. Transferee meets qualifications e. Transferee signs assignment and guaranty f. You and your guarantors and owners sign a general release. g. You remain liable for pre-Transfer obligations. h.You pay us a Transfer Fee. | |
| FA: 16.5 (related party transfers) | a. You give us prior written notice of the transfer. b. You are not in default c. Transferee meets qualifications d. Transferee assumes in writing the Franchise Agreement and the guaranty. e. You may not be in default under the Franchise Agreement. f. You pay us a Transfer Fee. g. You and your guarantors and owners must sign a general release and remain liable for pre-Transfer obligations | |
| n. Our right of first refusal to acquire your business | FA: 16.8 | We can match any offer for your Bakery or substantially all interest in your entity. |
| ES: 20.Q. | Above not applicable for an Express Bakery. | |
| o. Our option to | FA: 18.4 | We may purchase your Goods related to the Bakery at the fair |
| purchase your | market value (exclusive of good will) and may purchase your | |
| business | Accepted Location if you own it or your interest in any lease. | |
| ES: 20.U. | Above not applicable for an Express Bakery. | |
| p. Your death or disability | FA: 16.6 | Upon 180 days from your death or permanent incapacity you must transfer all rights and interests to buyer that complies with Transfer provisions, except no Transfer Fee will be due. |
| q. Non- | FA: 15.4 | No involvement in a competitive business (generally, similar types of |
| competition | businesses that offer products the same or similar to the Approved | |
| covenants | Products) anywhere. You may not divert or attempt to divert any | |
| during the | business or potential business, misuse vendor relationships, or | |
| term of the | perform, directly or indirectly, any other act injurious or prejudicial to | |
| franchise | the goodwill associated with the Proprietary Marks and the System. | |
| r. Non- competition covenants after the franchise is terminated or expires | FA: 15.4.B | For 12 months after expiration or termination, no involvement in a competitive business at the Accepted Location, within 3 miles of your Accepted Location, or within 3 miles of any Bakery; and no diverting or attempting to divert any business from any Bakery. |
| s. Modification of | FA: 8.3, 22.2 | No oral modifications, but we can change the Manuals. |
| the agreement | and 22.3 | |
| t. Integration/ merger clause | FA: 22.2 | Only the terms of the Franchise Agreement and related agreements are binding (subject to state law). Any representations or promises outside of the Disclosure Document and Franchise Agreement may not be enforceable. |
| u. Dispute | FA: 19.1 | Most disputes must be resolved by arbitration. |
| resolution by | ||
| arbitration or | ||
| mediation | ||
| v. Choice of forum | FA: 19.1 | Subject to state law, currently, arbitration or lawsuit must be in the metropolitan area of district court where our principal place of business is located (currently, Georgia). |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 93–100)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, Item 17 details that, subject to state law, arbitration or lawsuits must occur in the metropolitan area of the district court where Cinnabon's principal place of business is located. Currently, this location is in Georgia. This applies to disputes arising from the Franchise Agreement.
This means that if a Cinnabon franchisee has a dispute with the company that cannot be resolved informally, they may have to travel to Georgia for arbitration or court proceedings. This could involve significant travel expenses and legal fees, as the franchisee would likely need to hire attorneys familiar with Georgia law and be prepared to litigate or arbitrate in that jurisdiction.
It is important to note that this choice of forum is subject to state law, which means that in some cases, a franchisee may be able to argue that the dispute should be resolved in their home state. However, this would likely require a legal challenge to the franchise agreement's forum selection clause, which can be costly and time-consuming. Franchisees should consult with legal counsel to understand their rights and options in the event of a dispute with Cinnabon.