Does the Cinnabon franchise agreement state that franchisees are liable for misuse of Confidential Information and Trade Secrets even if they do not open the Franchised Business?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree that the Confidential Information and Trade Secrets provide you with a competitive advantage, that they will be economically valuable to you in the development of your Franchised Business, and that gaining access to Confidential Information and Trade Secrets is therefore a primary reason why you are entering into this Agreement.
You specifically agree that these restrictions are applicable even before you open the Franchised Business since you will receive valuable information and training about the System and the operation of the Franchised Business before you begin operations of your Franchised Business.
You agree that you are liable under this provision even if you do not open the Franchised Business as this Agreement requires.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to the 2025 Cinnabon Franchise Disclosure Document, franchisees are liable for the misuse of Confidential Information and Trade Secrets, even if they do not open the franchised business. Cinnabon emphasizes that access to this information is a primary reason for entering into the franchise agreement, providing a competitive advantage and economic value in developing the franchised business.
The agreement specifies that restrictions on using Confidential Information and Trade Secrets apply even before the Cinnabon store opens. This is because franchisees receive valuable information and training about the Cinnabon system and operations before commencing business.
Therefore, a prospective Cinnabon franchisee should understand that their obligations regarding Confidential Information and Trade Secrets begin as soon as they receive the information, regardless of whether they ever open the store. This liability continues even if the store does not open as required by the agreement.