What is included in the definition of 'Losses' for which a Cinnabon franchisee may be liable for indemnification?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
e deadlines that we specify (which shall be before your Opening Date if we have already established such a Purchasing Program), (ii) remain a member in good standing thereof throughout the Term, and (iii) pay all reasonable membership fees assessed by any Purchasing Program. Any membership fees set by us or our affiliates will not exceed 110% of our or our affiliates' actual costs and expenses related to such programs.
- 12.12 Prices. We reserve the right, to the fullest extent allowed by applicable law, to establish maximum, minimum, or other pricing requirements with respect to the prices you may charge for Approved Products, including required participation in system-wide discount programs and promotions. If we do not establish such pricing requirements, then you will have the right to determine the prices you charge.
13. INDEMNIFICATION; INSURANCE
13.1 Indemnification.
- A. Indemnification Obligation. You must defend, indemnify, and hold harmless us and our affiliates, our and their permitted successors and assigns, and each of our and their respective direct and indirect owners, directors, officers, managers, employees, agents, attorneys, and representatives (collectively, the "Indemnified Parties") from and against all Losses (defined below), which any of the Indemnified Parties may suffer, sustain, or incur as a result of a claim asserted or inquiry made formally or informally, or a legal action, investigation, or other proceeding brought, by a third party and directly or indirectly arising out of or relating to: (i) the operation of the Franchised Business; (ii) the business you conduct under this Agreement; (iii) your breach of this Agreement; (iv) your noncompliance or alleged noncompliance with any Law; or (v) any allegation that we or another Indemnified Party is a joint employer or otherwise responsible for your acts or omissions relating to your employees.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, franchisees are required to indemnify certain parties against losses. These 'Losses' encompass all obligations, liabilities, damages (including actual and consequential damages), and reasonable defense costs incurred by the indemnified parties. Indemnified parties include Cinnabon and its affiliates, their successors and assigns, and their respective owners, directors, officers, managers, employees, agents, attorneys, and representatives.
The franchisee's indemnification obligation arises from third-party claims or inquiries, whether formal or informal, and legal actions, investigations, or other proceedings that directly or indirectly relate to several key areas. These areas include the operation of the franchised Cinnabon business, the business conducted under the Franchise Agreement, any breach of the Franchise Agreement by the franchisee, noncompliance or alleged noncompliance with any law, or any allegation that Cinnabon or another indemnified party is a joint employer or otherwise responsible for the franchisee's actions or omissions relating to their employees.
Defense costs covered under the indemnification include arbitrators', attorneys', and expert witness fees, costs of investigation and proof of facts, court costs, travel and living expenses, and other expenses related to litigation, arbitration, or alternative dispute resolution. This applies regardless of whether litigation, arbitration, or alternative dispute resolution is actually commenced. Cinnabon will promptly notify the franchisee of any claim that may give rise to a claim of indemnity; however, failure to provide such notice does not release the franchisee from their indemnification obligations except to the extent the franchisee is materially prejudiced by such failure.