What happens to Cinnabon's liability if they reassign a lease to another franchisee after assuming the obligations of the original Cinnabon franchisee?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event of an assignment of the Franchise Agreement which has been approved by Franchisor, this Agreement shall be deemed to be assigned to the assignee of the Franchise Agreement and such assignee shall be deemed to have assumed all rights and obligations of Franchisee under this Agreement.
Company may assign this Agreement to any person or entity without Franchisee consent.
This Agreement will be binding on and inure to the benefit of the parties and their respective successors and permitted assigns.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, in the event of an assignment of the Franchise Agreement approved by Cinnabon, the agreement is deemed to be assigned to the new franchisee. This means the new franchisee assumes all the rights and responsibilities of the original franchisee under the agreement.
This clause protects Cinnabon by ensuring that if a franchise changes hands with their approval, the new owner is fully responsible for adhering to the terms of the Franchise Agreement. It also provides clarity for the incoming franchisee, who steps into the shoes of the previous owner with a clear understanding of their obligations.
For a prospective franchisee, this means that if you take over an existing Cinnabon location, you will be bound by the existing agreements and must fulfill all obligations outlined within them. It is crucial to thoroughly review all terms and conditions before assuming responsibility to avoid any unexpected liabilities or operational requirements. This also means that Cinnabon is released from the obligations of the lease once it is transferred to the new franchisee.