What happens if a Cinnabon franchisee makes a material misrepresentation to Cinnabon related to the Franchised Business?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
- C.
You or any of your Owners, officers, or directors: (i) are convicted of or plead no contest to a felony or a crime involving fraud or moral turpitude or any other crime that we deem likely to have an adverse effect on the good name, business, goodwill, image or reputation of the Franchised Business, the System, or the Marks, whether on a local, regional, or national scale (including any such convictions or pleas that occurred prior to the Effective Date that we learn of after the Effective Date); (ii) engage in fraudulent, deceptive, unethical, criminal, or other conduct that, in our determination, is likely to have an adverse effect on the good name, business, goodwill, image, or reputation of the Franchised Business, the System, or the Marks, whether on a local, regional, or national scale; (iii) make, or have made, any material misrepresentation to us related to the Franchised Business or this Agreement; or (iv) knowingly maintain false books or records or submit any false reports to us related to the Franchised Business.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to the 2025 Cinnabon Franchise Disclosure Document, if a Cinnabon franchisee or any of their owners, officers, or directors makes a material misrepresentation to Cinnabon related to the franchised business or the Franchise Agreement, Cinnabon has grounds to terminate the Franchise Agreement. This is considered a default that can lead to termination of the agreement.
This provision protects Cinnabon from franchisees who might provide false or misleading information that could impact the franchisor's decisions or the operation of the franchise system. Material misrepresentations could include inaccuracies in financial reports, operational data, or any other information that Cinnabon relies on to oversee the franchise.
The FDD states that Cinnabon has the right to terminate the agreement for this default. This means that Cinnabon does not necessarily have to provide an opportunity for the franchisee to correct the misrepresentation before terminating the agreement, although the specific terms of termination, including any cure periods, would be detailed elsewhere in the agreement. Franchisees should ensure that all information provided to Cinnabon is accurate and truthful to avoid potential termination of their franchise agreement.
This type of clause is standard in franchise agreements to ensure transparency and trust between the franchisor and franchisee. Franchisees should be diligent in their reporting and communication with Cinnabon to maintain compliance and avoid any actions that could be construed as a material misrepresentation.