Are Cinnabon franchisee's payment obligations excused under the force majeure clause?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
If a Force Majeure occurs, provided that the party promptly provides the other party with written notice of the Force Majeure, the party so affected will be relieved of its respective obligations to the extent that that party is necessarily prevented, or materially hindered or delayed, in performance during the period of the Force Majeure, except a Force Majeure shall not relieve a party of any (i) payment obligations for monies owed, (ii) obligations that existed prior to the start of the period of the Force Majeure, (iii) obligations that start after the period of Force Majeure, or (iv) other obligations that are not necessarily prevented, or materially hindered or delayed during the period of the Force Majeure.
A force majeure event does not include, whether directly or indirectly, economic hardship, changes in market conditions, or insufficiency of funds.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, a force majeure event will not excuse a franchisee's payment obligations. The force majeure clause outlines specific conditions that may relieve a party of their obligations under the agreement, such as acts of God, terrorism, war, or governmental orders. However, this relief explicitly excludes payment obligations for monies owed.
This means that even if a Cinnabon franchise is affected by a force majeure event that prevents or hinders its operation, the franchisee is still responsible for fulfilling all payment obligations to Cinnabon. This includes royalties, marketing fees, and any other outstanding debts.
Furthermore, the FDD clarifies that economic hardship, changes in market conditions, or insufficiency of funds do not constitute force majeure events. Therefore, franchisees cannot claim force majeure as a reason to avoid payment obligations due to financial difficulties. This is a critical point for prospective franchisees to understand, as it highlights the importance of having sufficient financial resources to weather unforeseen circumstances without relying on the force majeure clause to excuse payments.