How does Indiana law affect Cinnabon's ability to terminate a franchise agreement unilaterally, and which section of the Franchise Agreement does this supersede in Indiana?

According to Cinnabon's 2025 Franchise Disclosure Document, Indiana law impacts Cinnabon's ability to unilaterally terminate a franchise agreement. Specifically, Indiana Code § 23-2-2.7-1(7) prohibits Cinnabon from unilaterally terminating a franchise without 'good cause' or in 'bad faith.' The FDD defines 'good cause' as a material breach of the franchise agreement. This Indiana law supersedes any conflicting provisions within Section 17 (Default and Termination) of the Franchise Agreement for franchises operating in Indiana.

In practical terms, this means that Cinnabon cannot terminate a franchise agreement in Indiana without demonstrating a legitimate and justifiable reason, such as the franchisee's failure to comply with the terms of the agreement. This provision offers Cinnabon franchisees in Indiana greater protection against arbitrary or unfair termination by Cinnabon.

This protection aligns with franchise laws in many states that aim to balance the power dynamic between franchisors and franchisees. Prospective Cinnabon franchisees in Indiana should carefully review Section 17 of the Franchise Agreement in conjunction with the Indiana addendum to fully understand their rights and obligations regarding termination.