If a Cinnabon franchisee violates the Personal Covenants related to Confidential Information or Trade Secrets, can Cinnabon terminate the agreement?

According to the 2025 Cinnabon Franchise Disclosure Document, Cinnabon can terminate the franchise agreement if the franchisee or their Owners violate the Personal Covenants or other restrictive covenants, specifically those related to the use of Confidential Information or Trade Secrets as outlined in Section 15 of the agreement. This means that any unauthorized use or disclosure of sensitive information, such as recipes, marketing plans, or supplier details, can lead to termination.

Section 15 of the Cinnabon franchise agreement defines both "Confidential Information" and "Trade Secrets" extensively. Trade Secrets include the composition of Proprietary Goods, Recipes, advertising, marketing, and public relations strategies, and marketing analyses. Confidential Information includes sources of supply, training materials, marketing plans, the agreement itself, customer information, and other information provided by Cinnabon. Franchisees and their owners must understand that these categories are protected, and unauthorized use or disclosure can have severe consequences.

The Personal Covenants section of the Cinnabon franchise agreement also stipulates that individuals with an equity interest in the franchisee are personally bound by the obligations and covenants in Section 15. This means that not only the franchisee entity but also the individual owners can be held responsible for breaches related to Confidential Information and Trade Secrets. This personal liability underscores the importance of ensuring that all owners and stakeholders are fully aware of and compliant with these confidentiality obligations.

This clause is typical in franchise agreements to protect the franchisor's intellectual property and competitive advantage. Prospective Cinnabon franchisees should carefully review Section 15 and Schedule B (Personal Covenants) of the franchise agreement to fully understand their obligations and the potential consequences of non-compliance. They should also ensure that all owners and employees are properly trained and understand the importance of maintaining the confidentiality of Cinnabon's proprietary information.