Does the Cinnabon franchise agreement grant franchisees any protected or exclusive rights?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchise.
10. Section 3.2.B. (Advertising Contribution):
The Advertising Contribution shall be in an amount we determine, in our sole discretion, which when combined with the Local Marketing Obligation (as 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 will collect the Advertising Contribution from you based on the portion of the Net Sales of the Franchised Business that are attributable to products that we and the Co-Branded Franchisor mutually agree, in our and its sole discretion, to credit towards the Cinnabon® side of the Franchised Business. Pursuant to the Co-Branded Agreement, the Co-Branded Franchisor will collect an advertising contribution from you based on the remaining portion of the Net Sales of the Franchised Business that are attributable to products that we and the Co-Branded Franchisor mutually agree, in our and its sole discretion, to credit towards the Co-Branded Franchise's side of the Franchised Business.
- 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. [For Auntie Anne's Co-Branded Bakeries:] During the Term, we will not establish or operate, nor license any other person to establish or operate, a Business operating under the Marks and the System that is co-branded and co-located with an Auntie Anne's® business that is operated under the Auntie Anne's® marks and(a "Co-Branded 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). Co-Branded Businesses do not include single-branded Businesses and businesses that do not include the exact combination of multiple brands as the Co-Branded Business (such as a Business that is co-branded with a brand other than the Auntie Anne's® brand or that is multibranded with the Auntie Anne's® brand and one or more other brands).
[For Carvel Co-Branded Bakeries:] During the Term, we will not establish or operate, nor license any other person to establish or operate, a Business operating under the Marks and the System that is co-branded and co-located with a Carvel® business that is operated under the Carvel® marks and system (a "Co-Branded 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).
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to the 2025 Cinnabon Franchise Disclosure Document, the availability of protected territories depends on the type of location. For Streetside Locations, Cinnabon grants a protected territory, giving franchisees limited exclusive rights within a defined area. This Area of Protection is typically a specified radius (e.g., a certain mile radius or block radius) from the franchise's accepted location. Cinnabon will not establish or license another Swirl Business at a Streetside Location within this Area of Protection during the franchise term. Franchisees must sign documentation, including a general release, to formalize the Area of Protection. If the franchisee relocates, Cinnabon will specify a new Area of Protection for the new location.
However, for Other Locations, such as airports, malls, and transportation centers, Cinnabon franchisees do not receive any protected or exclusive rights. Cinnabon retains the right to establish or license franchises and company-owned businesses offering similar products in these Other Locations, regardless of their proximity to the franchisee's location. This also extends to alternative channels of distribution like supermarkets, e-commerce, and delivery kitchens. Cinnabon and its affiliates reserve all rights not expressly granted to the franchisee, allowing them to conduct business activities under any name and in any geographic area.
This distinction between Streetside Locations and Other Locations is critical for prospective Cinnabon franchisees. Those considering Streetside Locations can benefit from a protected territory, reducing direct competition from other Cinnabon outlets. Conversely, franchisees in Other Locations face the risk of competition from other Cinnabon businesses, including those in non-traditional venues and through alternative distribution channels. Therefore, understanding the location type and associated rights is essential for evaluating the potential risks and opportunities of a Cinnabon franchise.