If Cinnabon merges with a company that has businesses competitive with Cinnabon bakeries, can Cinnabon allow those businesses to continue operating under a different name inside a Cinnabon franchisee's area of protection?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
- (v) We and/or our affiliates may acquire, be acquired by, or merge with another entity with existing businesses or franchises that are similar to or competitive with the Bakery anywhere (including inside and outside the Area of Protection (if any)) and (a) convert the other businesses to be Bakeries operating under the Proprietary Marks and the System (except for Co-Branded Bakeries inside your Area of Protection (if any)), (b) permit the other businesses to continue to operate under another name anywhere (including inside your Area of Protection (if any)), and/or (c) permit the businesses to operate under another name and convert your Bakery and existing Bakeries to such other name.
Source: Item 12 — Territory (FDD pages 82–87)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, Cinnabon retains specific rights regarding business operations, even within a franchisee's area of protection. Specifically, Cinnabon or its affiliates may acquire, be acquired by, or merge with another entity that has businesses similar to or competitive with Cinnabon bakeries.
Following such a merger or acquisition, Cinnabon has the right to permit these other businesses to continue operating under a different name, even if they are located inside a Cinnabon franchisee's area of protection. This means that a Cinnabon franchisee could potentially face competition from a business that is owned or affiliated with Cinnabon, even if that business operates under a different brand name within the franchisee's protected area.
This clause highlights a potential risk for franchisees, as Cinnabon retains considerable flexibility in managing its business and responding to market changes, even if those actions might impact individual franchisees. Prospective franchisees should carefully consider this aspect of the Franchise Agreement and evaluate the potential impact of such competition on their business before investing in a Cinnabon franchise.