If a Cinnabon franchise agreement is reinstated after termination, what reinstatement fee must the franchisee pay to Cinnabon?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
- A.
Cure the default that led to the termination of this Agreement;
- B.
Pay us all fees due us, including Royalty Fees and Advertising Contributions;
- C.
Pay us a fee to compensate us for your continued use of the Marks during the period of termination equal to the number of days between the date of termination of this Agreement and the date of reinstatement of this Agreement multiplied by the average daily Royalty Fee due to us during the calendar month preceding the date of termination,
- D.
Pay us a reinstatement fee of 10% of the amount of the then-current initial franchise fee; and
E. Sign and return to us our standard form of reinstatement agreement that we specify, which will include your commitment to a refurbishment plan that you and we must agree on.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to the 2025 Cinnabon Franchise Disclosure Document, if a franchise agreement is reinstated after termination, the franchisee must meet several conditions. One of these conditions involves paying a reinstatement fee. This fee is calculated as 10% of the then-current initial franchise fee.
In addition to the reinstatement fee, the franchisee must also cure the default that led to the termination of the agreement. This means resolving whatever issues caused the original termination, such as failure to meet performance standards or violation of the franchise agreement terms. The franchisee is also responsible for paying all outstanding fees, including royalty fees and advertising contributions, to bring their account current.
Furthermore, Cinnabon requires compensation for the franchisee's continued use of the brand's marks during the termination period. This compensation is calculated by multiplying the number of days between the termination date and the reinstatement date by the average daily royalty fee from the month preceding the termination. Finally, the franchisee must sign Cinnabon's standard reinstatement agreement, which includes a commitment to a mutually agreed-upon refurbishment plan for the franchise location.