For Cinnabon franchises offered and sold in Indiana, does the Indiana Addendum modify the geographical extent of the post-term covenant not to compete, and if so, how?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 23: Receipts]
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- The laws of the State of Indiana supersede any provisions of the Franchise Agreement, or Georgia law if these provisions are in conflict with Indiana law. The Franchise Agreement will be governed by Indiana law, rather than Georgia law as stated in Section 22.5 (Applicable Law) of the Franchise Agreement.
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- Venue for litigation will not be limited to Georgia, as specified in Section 19.1 (Dispute Resolution) of the Franchise Agreement.
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- The prohibition by Indiana Code 23-2-2.7-1(7) against unilateral termination of the franchise without good cause or in bad faith, good cause being defined therein as "a material breach of the franchise agreement," will supersede the provisions of Section 17 (Default and Termination) of the Franchise Agreement in the State of Indiana to the extent they may be inconsistent with this prohibition.
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- No release language stated in the Franchise Agreement will relieve us or any other person, directly or indirectly, from liability imposed by the laws on franchising of the State of Indiana.
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- Section 15.4.B. (Post-Term) of the Franchise Agreement is revised to limit the geographical extent of the post-term covenant not to compete to an area of reasonable size for all franchises sold in the State of Indiana.
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- Section 15.5 (Remedies) of the Franchise Agreement will not apply to franchises offered and sold in the State of Indiana.
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- Notwithstanding the terms of Section 4 (Territorial Rights) of the Franchise Agreement, we will not compete unfairly with you within a reasonable area.
INDIANA ADDENDUM TO PERSONAL COVENANTS AGREEMENT
Notwithstanding anything to the contrary stated in the Personal Covenants Agreement, the following provisions will supersede and apply:
- The Personal Covenants Agreement is revised to limit the geographical extent of the covenant not to compete to an area of reasonable size for all franchises sold in the State of Indiana.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to the 2025 Cinnabon Franchise Disclosure Document, the Indiana Addendum does modify the geographical extent of the post-term covenant not to compete for franchises sold in Indiana. Specifically, Section 15.4.B of the Franchise Agreement, which addresses restrictive covenants after the termination of the franchise, is revised. The revision limits the geographical scope of the post-term covenant to an area of "reasonable size" for all Cinnabon franchises sold in Indiana.
This modification means that if a Cinnabon franchisee in Indiana leaves the system, the restrictions on operating a competing business will be limited to a reasonable geographic area. Without this addendum, the standard franchise agreement might impose a broader, potentially more restrictive, non-compete area. The Indiana Addendum to the Personal Covenants Agreement similarly limits the geographical extent of the covenant not to compete to a reasonable size for franchises sold in Indiana.
For a prospective Cinnabon franchisee in Indiana, this is a beneficial change. It provides more flexibility and reduces the risk of being overly restricted in future business endeavors after leaving the Cinnabon system. Franchisees should consult with a legal professional to understand what constitutes a "reasonable size" in their specific circumstances, as this term is subjective and can vary based on factors such as market conditions and the location of the franchise.