What is the Cinnabon franchisee's responsibility regarding cooperation and information sharing in the defense of a claim?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
e deadlines that we specify (which shall be before your Opening Date if we have already established such a Purchasing Program), (ii) remain a member in good standing thereof throughout the Term, and (iii) pay all reasonable membership fees assessed by any Purchasing Program. Any membership fees set by us or our affiliates will not exceed 110% of our or our affiliates' actual costs and expenses related to such programs.
- 12.12 Prices. We reserve the right, to the fullest extent allowed by applicable law, to establish maximum, minimum, or other pricing requirements with respect to the prices you may charge for Approved Products, including required participation in system-wide discount programs and promotions. If we do not establish such pricing requirements, then you will have the right to determine the prices you charge.
13. INDEMNIFICATION; INSURANCE
13.1 Indemnification.
- A. Indemnification Obligation. You must defend, indemnify, and hold harmless us and our affiliates, our and their permitted successors and assigns, and each of our and their respective direct and indirect owners, directors, officers, managers, employees, agents, attorneys, and representatives (collectively, the "Indemnified Parties") from and against all Losses (defined below), which any of the Indemnified Parties may suffer, sustain, or incur as a result of a claim asserted or inquiry made formally or informally, or a legal action, investigation, or other proceeding brought, by a third party and directly or indirectly arising out of or relating to: (i) the operation of the Franchised Business; (ii) the business you conduct under this Agreement; (iii) your breach of this Agreement; (iv) your noncompliance or alleged noncompliance with any Law; or (v) any allegation that we or another Indemnified Party is a joint employer or otherwise responsible for your acts or omissions relating to your employees.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, franchisees have an indemnification obligation to defend, indemnify, and hold harmless Cinnabon and its affiliates from any losses resulting from third-party claims or legal actions related to the operation of the franchised business. This includes claims arising from the franchisee's business operations, breach of the Franchise Agreement, noncompliance with laws, or allegations that Cinnabon is a joint employer. The term "Losses" encompasses all obligations, liabilities, damages, and reasonable defense costs incurred by Cinnabon.
Defense costs include fees for arbitrators, attorneys, and expert witnesses, as well as costs for investigation, proof of facts, court costs, travel, living expenses, and other litigation-related expenses. This applies regardless of whether litigation, arbitration, or alternative dispute resolution is formally commenced.
Cinnabon will promptly notify the franchisee of any claim that may lead to an indemnity claim. However, any failure to provide such notice by Cinnabon does not release the franchisee from their indemnification obligations unless the franchisee is materially prejudiced by the lack of notice. This means that franchisees are expected to actively participate in the defense of any claim by providing necessary information and cooperation, and they may be financially responsible for costs incurred by Cinnabon in defending against such claims.