If the Cinnabon SRU Agreement is terminated before the first anniversary of the Commencement Date, what payment obligation does the Lessee have to the Lessor?

According to Cinnabon's 2025 Franchise Disclosure Document, if the SRU (Satellite Retail Unit) Agreement is terminated before the first anniversary of the Commencement Date, the Lessee is obligated to pay the Lessor the Maximum Monthly Rental Fee for each month (or portion of a month) remaining between the termination date and the first anniversary of the Commencement Date.

This means that if a Cinnabon franchisee terminates the SRU agreement early, they will be responsible for paying the monthly rental fees for the remainder of the first year. This could represent a significant financial obligation, especially if the termination occurs early in the term. The purpose of this clause is likely to protect the Lessor (Cinnabon Franchisor SPV LLC) from losses incurred due to early termination of the lease agreement.

Prospective Cinnabon franchisees should carefully consider this termination clause and factor in the potential costs of early termination when evaluating the SRU opportunity. It would be prudent to discuss the Maximum Monthly Rental Fee with the franchisor to fully understand the financial implications of this clause. Additionally, franchisees should assess their ability to meet the monthly rental obligations for the full year to mitigate the risk of incurring these termination fees.