Does the Cinnabon Franchise Agreement contain a covenant not to compete that extends beyond the termination of the franchise?

According to the 2025 Cinnabon Franchise Disclosure Document, Section 15.4.B of the Franchise Agreement addresses restrictive covenants after the termination of the agreement. Specifically, for franchises sold in Indiana, this section is revised to limit the geographical extent of the post-term covenant not to compete to an area of reasonable size. This implies that Cinnabon's standard Franchise Agreement does include a post-term covenant not to compete, but its enforceability and scope may vary by state.

For prospective Cinnabon franchisees, this means that after the franchise agreement ends, there may be restrictions on operating a competing business. The Indiana addendum suggests that without such a revision, the standard agreement might impose a broader restriction than is considered reasonable under Indiana law. It is important to note that the FDD highlights that covenants not to compete are generally considered unenforceable in North Dakota.

Therefore, a prospective franchisee should carefully review Section 15.4.B of the Cinnabon Franchise Agreement and any state-specific addenda to fully understand the terms of the post-term non-compete clause. They should also seek legal counsel to determine the enforceability and specific restrictions in their state, as these covenants can significantly impact their ability to pursue similar business ventures after the franchise agreement expires. Understanding these limitations is crucial for planning future business activities and assessing the overall value and flexibility of the Cinnabon franchise opportunity.