What happens if a part of the Cinnabon franchise agreement is deemed invalid?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
If any term in these Personal Covenants or in Section 15 of the Franchise Agreement must be interpreted by a court or an arbitrator of competent jurisdiction, you agree that: (i) these Personal Covenants are made freely and voluntarily by you, an experienced businessperson, in an arms-length commercial transaction; (ii) these Personal Covenants or Section 15 of the Franchise Agreement should not be construed in the same manner or under the same body of law as analogous terms in a contract of employment; (iii) if a court or arbitrator finds that any term in these Personal Covenants or Section 15 of the Franchise Agreement is invalid or unenforceable for any reason, that term will automatically be modified to the minimum extent necessary to make it valid and enforceable, and the modification will be deemed to have been a part of these Personal Covenants or Section 15 of the Franchise Agreement as of the date you sign these Personal Covenants or the Effective Date of the Franchise Agreement, whichever is later; (iv) the court or arbitrator should strictly construe these terms in favor of enforcement; and (v) if any term could be construed two ways, one of which would render the term valid and the other of which would render the term invalid, the court or arbitrator will construe the term in the manner that renders it valid.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to the 2025 Cinnabon Franchise Disclosure Document, if a court or arbitrator finds any term in the Personal Covenants or Section 15 of the Franchise Agreement invalid or unenforceable, that term will be automatically modified to the minimum extent necessary to make it valid and enforceable. This modification is considered part of the agreement from the date the Personal Covenants are signed or the Franchise Agreement's effective date, whichever is later.
The document specifies that these Personal Covenants are made freely and voluntarily by an experienced businessperson in an arms-length commercial transaction and should not be construed under the same body of law as analogous terms in an employment contract. The court or arbitrator is instructed to strictly construe these terms in favor of enforcement.
Furthermore, if a term could be interpreted in two ways, one valid and one invalid, the interpretation that renders the term valid will be used. This clause aims to ensure that the agreement remains as enforceable as possible, even if specific terms are challenged. This is a fairly standard clause in franchise agreements, intended to preserve the overall contract despite potential issues with individual provisions.