Is a Cinnabon franchisee bound by the arbitrator's decision?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
- E.
Binding Decision.
The decision and award of the arbitrator will be final, conclusive, and binding on all parties regarding any claims, counterclaims, issues, or accountings presented or pled to the arbitrator, and judgment on the award, including any partial, temporary or interim award, may be entered in any court of competent jurisdiction.
The parties agree that the arbitrator may award interest from the date of any damages incurred for breach or other violation of this Agreement, and from the date of the award, until paid in full, at a rate to be fixed by the arbitrator, but in no event less than 2.5% per annum above the Citibank Preference Rate quoted for the corresponding periods, as reported in The Wall Street Journal, or the maximum rate permitted by applicable law, whichever is less.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, the decision and award of the arbitrator will be final, conclusive, and binding on all parties regarding any claims, counterclaims, issues, or accountings presented or pled to the arbitrator. This means that once the arbitrator makes a decision, it is legally enforceable and all parties, including the franchisee, must abide by it. Judgment on the award, including any partial, temporary or interim award, may be entered in any court of competent jurisdiction. This reinforces the binding nature of the arbitrator's decision, as it can be formally recognized and enforced by a court if necessary.
The FDD also states that the arbitrator may award interest from the date of any damages incurred for breach or other violation of the Franchise Agreement, and from the date of the award, until paid in full. The interest rate will be fixed by the arbitrator, but will not be less than 2.5% per annum above the Citibank Preference Rate quoted for the corresponding periods, as reported in The Wall Street Journal, or the maximum rate permitted by applicable law, whichever is less. This provision ensures that the franchisee may be responsible for covering interest on damages if they are found to be in breach of the agreement.
However, certain disputes will not be resolved through arbitration unless Cinnabon consents to arbitration. These include disputes that arise under or are related to the Lanham Act, disputes that otherwise relate to the ownership or validity of any of the Intellectual Property, disputes that involve enforcement of Cinnabon's intellectual property rights or protection of their Confidential Information or Trade Secrets, or disputes related to the payment of sums the franchisee owes Cinnabon or its affiliates. Any litigation under this subsection will be filed exclusively in the United States District Court for the district in which Cinnabon has its principal place of business at the time of filing, and the franchisee irrevocably consents to this court's jurisdiction.