If the termination provisions in the Cinnabon Franchise Agreement are inconsistent with the Federal Bankruptcy Code, which law applies?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
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- If any of the provisions of the Franchise Agreement concerning termination are inconsistent with either the California Franchise Relations Act or the Federal Bankruptcy Code (concerning termination of the Agreement on certain bankruptcy-related events), then the Federal Bankruptcy Code applies.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to the 2025 Cinnabon Franchise Disclosure Document, the Federal Bankruptcy Code will take precedence if any termination provisions within the Franchise Agreement are inconsistent with it, specifically for franchises in California. This means that Cinnabon franchisees in California can rely on the protections and regulations outlined in the Federal Bankruptcy Code, even if the Franchise Agreement stipulates otherwise.
This addendum is crucial for prospective Cinnabon franchisees in California as it clarifies the legal framework governing the franchise relationship, especially concerning termination. The explicit mention of the Federal Bankruptcy Code ensures that franchisees are aware of their rights and the legal standards that will be applied in the event of financial distress or bankruptcy proceedings.
It is important for potential franchisees to consult with legal counsel to fully understand the implications of these provisions and how they interact with other aspects of the Franchise Agreement and relevant state and federal laws. This ensures that franchisees are well-informed and can make sound business decisions, particularly when considering the potential risks and benefits of investing in a Cinnabon franchise.