What are the non-competition covenants after the Cinnabon franchise is terminated or expires?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provisions | Section in Franchise Agreement | Summary |
|---|---|---|
| o. You must comply with our right of first refusal. p. If you operate a Co-Branded Bakery, the Co-Branded Agreement or Co-Branded Franchise are transferred at the same time. | ||
| FA: 16.4 (non-control transfers) | a. You give us prior written notice of the transfer. b. You pay all sums owed. c. You are not in default d. Transferee meets qualifications e. Transferee signs assignment and guaranty f. You and your guarantors and owners sign a general release. g. You remain liable for pre-Transfer obligations. h.You pay us a Transfer Fee. | |
| FA: 16.5 (related party transfers) | a. You give us prior written notice of the transfer. b. You are not in default c. Transferee meets qualifications d. Transferee assumes in writing the Franchise Agreement and the guaranty. e. You may not be in default under the Franchise Agreement. f. You pay us a Transfer Fee. g. You and your guarantors and owners must sign a general release and remain liable for pre-Transfer obligations | |
| n. Our right of first refusal to acquire your business | FA: 16.8 | We can match any offer for your Bakery or substantially all interest in your entity. |
| ES: 20.Q. | Above not applicable for an Express Bakery. | |
| o. Our option to | FA: 18.4 | We may purchase your Goods related to the Bakery at the fair |
| purchase your | market value (exclusive of good will) and may purchase your | |
| business | Accepted Location if you own it or your interest in any lease. | |
| ES: 20.U. | Above not applicable for an Express Bakery. | |
| p. Your death or disability | FA: 16.6 | Upon 180 days from your death or permanent incapacity you must transfer all rights and interests to buyer that complies with Transfer provisions, except no Transfer Fee will be due. |
| q. Non- | FA: 15.4 | No involvement in a competitive business (generally, similar types of |
| competition | businesses that offer products the same or similar to the Approved | |
| covenants | Products) anywhere. You may not divert or attempt to divert any | |
| during the | business or potential business, misuse vendor relationships, or | |
| term of the | perform, directly or indirectly, any other act injurious or prejudicial to | |
| franchise | the goodwill associated with the Proprietary Marks and the System. | |
| r. Non- competition covenants after the franchise is terminated or expires | FA: 15.4.B | For 12 months after expiration or termination, no involvement in a competitive business at the Accepted Location, within 3 miles of your Accepted Location, or within 3 miles of any Bakery; and no diverting or attempting to divert any business from any Bakery. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 93–100)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, franchisees are subject to certain non-competition covenants after the franchise agreement expires or is terminated. Specifically, for a period of 12 months following the expiration or termination of the franchise, a franchisee cannot be involved in a competitive business at the Accepted Location.
This restriction also extends to a 3-mile radius around both the former franchisee's Accepted Location and any other Cinnabon Bakery location. Furthermore, the franchisee is prohibited from diverting or attempting to divert business from any Cinnabon Bakery during this 12-month period.
These non-compete terms are fairly standard in the franchise industry to protect the brand and other franchisees. A prospective Cinnabon franchisee should carefully consider the implications of these restrictions, especially if they plan to remain in the same geographic area after their franchise agreement ends.