Does Cinnabon grant franchisees an exclusive territory?

[Item 12: Territory]

Accepted Location

Your Bakery may only be operated at the Accepted Location. If we have not yet accepted a site for the Bakery when we execute the Franchise Agreement, you must select a location that we accept in accordance with our site selection criteria within a site selection area that we specify. We will determine the site selection area on a case-by-case basis. You will have no exclusive or protected rights in your site selection area.

If you operate a Concession Bakery, you will be required to submit all locations from which you will operate the Concession Bakery in advance for our written approval, which will each be considered to be an Accepted Location. In most cases, we will not approve the operation of a Concession Bakery within two miles of a permanent Bakery location.

No Exclusive Territory

You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.

No Protected Territory for All Bakeries other than Co-Branded Bakeries in Streetside Locations

This Section applies to all Bakeries other than Co-Branded Bakeries in Streetside Locations.

The Franchise Agreement licenses you to manufacture and sell Approved Products at retail only from the specific Bakery location that we accepted. We do not grant you any exclusive territory or other territorial rights under these agreements other than the right to sell Approved Products at retail from the Bakery.

Limited Protected Territorial Rights for Co-Branded Bakeries in Streetside Locations

This Section applies only to Co-Branded Bakeries in Streetside Locations.

If you operate a Co-Branded Bakery in a Streetside Location, while you will not receive an exclusive territory, you will receive a territory with limited protected rights (an "Area of Protection") as described in this Item. For a Co-Branded Bakery (other than a Swirl Bakery), this means that, during the term of the Franchise Agreement, we will not establish or operate, nor license any other person to establish or operate, another Co-Branded Bakery (other than a Swirl Bakery) at a Streetside Location within the Area of Protection. For the avoidance of doubt, we may operate, or license others to operate, single-branded Bakeries, Swirl Bakeries, or Bakeries that do not include the exact combination of brands as the Co-Branded Bakery (such as a Bakery that is co-branded with a brand other than the second brand in the Co-Branded Bakery or that is multi-branded with such second brand and one or more other brands).

If you operate a Swirl Bakery in a Streetside Location, during the term of the Franchise Agreement, we will not establish or operate, nor license any other person to establish or operate, another Swirl Bakery at a Streetside Location within the Area of Protection. For the avoidance of

doubt, we may operate, or license others to operate, single-branded Bakeries or Carvel Co-Branded Bakeries inside or outside the Area of Protection.

We may negotiate your Area of Protection with you. The size and scope of the Area of Protection will be in the Franchise Agreement and will be determined on a case-by-case basis. The Area of Protection will not exceed a one-block radius for a Bakery in an urban location (the downtown area of the 100 largest U.S. cities as measured by population as of the effective date of the Franchise Agreement) or a one-mile radius for a Bakery in any non-urban location. There is no minimum Area of Protection for a Bakery. The factors that we consider in determining the size of an Area of Protection include current and projected market demand, demographics and population based on our research and experience, median household income, presence of other businesses, location of competitors, traffic patterns, access and visibility, location of other Bakeries, our future development plans and other market conditions.

If the Accepted Location is not known when you sign the Franchise Agreement, we will designate the Area of Protection once we authorize a location for the Bakery and the Accepted Location and Area of Protection will be documented when we accept the location. If the Accepted Location is known when you sign the Franchise Agreement, the Franchise Agreement will specify the Accepted Location for your Bakery and the Area of Protection.

If you default under the Franchise Agreement and fail to cure the default in the applicable cure period (if any), we have the right to reduce or eliminate your Area of Protection, in addition to our other remedies. Except for as described in the previous sentence, the Area of Protection may not be altered before the expiration or termination of the Franchise Agreement. Your territorial protection is not dependent on achievement of a certain sales volume, market penetration or other factors, other than compliance with the Franchise Agreement.

Source: Item 12 — Territory (FDD pages 82–87)