Can Cinnabon charge a fee to review a franchisee's systems for compliance, and if so, what is the maximum fee?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
rch out and destroy any adulterated, diluted, or contaminated Approved Products, eliminate their source, and remedy all unsanitary, unsafe, or otherwise hazardous conditions present. You may not resume operation of the Franchised Business until our laboratory analysis of your Approved Products or inspection of your Franchised Business, as applicable, demonstrates compliance with all applicable Laws and Standards. You must promptly implement any remedial measures we require to cure the default. If we conclude through any examination, analysis, and/or inspection that the Approved Products have been adulterated in any way or that your Franchised Business is not in compliance with applicable Laws, you shall, upon demand, reimburse us for all reasonable expenses connected with any such examination, analysis, or inspection under this Agreement (including reasonable product analysis fees).
- B. Additional Remedies. If: (i) we determine that a violation of Section 12.4.A. (Suspension of Operations) has occurred and that you have committed a similar violation within the one-year period before the date of the inspection or analysis; (ii) you fail or refuse to comply with any or all of the remedial measures we require; (iii) you fail to provide us with full cooperation in the course of any inspection or analysis we conduct; or (iv) we determine that there has been any repetition during the Term of any occurrence under Section 12.4.A., then you will pay us a fee for the inspection or analysis in the amount of $5,000; plus the travel and living expenses of our inspectors or representatives and any other expenses we incur in connection with this Section, including our attorneys' fees.
- C.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to the 2025 Cinnabon Franchise Disclosure Document, Cinnabon can charge franchisees a fee for inspections or analyses under specific circumstances. If Cinnabon determines a franchisee has violated Section 12.4.A (Suspension of Operations) and committed a similar violation within the past year, or if the franchisee fails to comply with required remedial measures, refuses cooperation during inspections, or repeats a violation of Section 12.4.A, the franchisee will be charged a fee. This fee amounts to $5,000, in addition to covering the travel and living expenses of Cinnabon's inspectors or representatives, as well as any legal fees incurred during the process.
In addition to the inspection fee, Cinnabon also reserves the right to charge non-compliance fees for failing to meet any of the brand's standards or any provision within the Franchise Agreement. These fees, which are issued upon written notice, currently range from $25 to $500 per single violation. These non-compliance fees are detailed in the manuals or in writing, and Cinnabon may modify them periodically with written notice. These fees can be charged repeatedly, even daily, if the non-compliance continues. The amount may vary depending on the severity and frequency of the defaults, but Cinnabon can only increase the fees by a limited amount each calendar year, referred to as the Allowed Adjustment.
These fees are in addition to any other remedies Cinnabon may pursue, including terminating the Franchise Agreement. The FDD specifies that these remedies are not exclusive and do not limit Cinnabon's rights under Section 17 (Default and Termination). This means that Cinnabon has multiple avenues for addressing non-compliance, ranging from monetary penalties to terminating the franchise agreement. Prospective franchisees should be aware of these potential costs and ensure they fully understand and adhere to Cinnabon's standards and the terms of the Franchise Agreement to avoid these fees.