Is Cinnabon's option to purchase a franchisee's business applicable to Express Bakeries?
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. |
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, Cinnabon's option to purchase a franchisee's business is not applicable to Express Bakeries. The FDD outlines Cinnabon's option to purchase a franchisee's business in Section 18.4 of the Franchise Agreement, stating that Cinnabon may purchase goods related to the bakery at fair market value (exclusive of goodwill) and may purchase the Accepted Location if the franchisee owns it or their interest in any lease.
However, Section 20.U of the Express Schedule clarifies that this option is not applicable for an Express Bakery. This means that Cinnabon does not have the right to purchase the assets or location of an Express Bakery under the same terms as a standard bakery.
This distinction is important for prospective franchisees to understand, as it affects the potential exit strategies and the value that Cinnabon places on different types of franchise locations. Express Bakery franchisees should be aware that Cinnabon's standard option to purchase their business does not apply, which may influence their decisions regarding the sale or transfer of their franchise.