If a Cinnabon franchise is terminated after the fourth year of operation, what amount is owed?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
ng and maintaining all permits/licenses necessary for the operation of the SRU.
- d. Lessee shall sell only those products from the SRU that are approved by the Franchisor from time to time.
- e. Lessee acknowledges that this Agreement does not modify or eliminate Lessee's obligation to pay to Franchisor any royalty fees, advertising contributions, and any other fees required under the Franchise Agreement, including royalty fees and advertising contributions payable to Franchisor related to the operation of the SRU.
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- **Modification of the SRU
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to the 2025 Cinnabon Franchise Disclosure Document, the amount owed to Cinnabon if the franchise is terminated depends on when the termination occurs. If the termination happens after the fourth year of operation, the amount owed is $0.
This means that a franchisee who has operated their Cinnabon business for more than four years will not be subject to any further payments to the franchisor if the agreement is terminated. This could be a significant benefit for franchisees as it limits their financial exposure in the event of termination after a certain period.
However, it's important to note that this applies specifically to the amount owed as a result of the termination itself. Other obligations or debts to Cinnabon, such as outstanding royalties or vendor payments, would still need to be settled regardless of the termination date.