For what reasons can Cinnabon terminate the Satellite Retail Unit Addendum without cause?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in the SRU Addendum | Summary |
|---|---|---|
| a. Length of the SRU Addendum term | Not applicable | Length of term is dependent on Franchise Agreement term. |
| b. Renewal or extension of the term | Not applicable | |
| c. Requirements for franchisee to | Not applicable | |
| renew or extend | ||
| d. | 15 | You must give us 14 days' advance written notice. |
| Termination by franchisee | ||
| e. Termination by us without cause | 15 | We may terminate the SRU Addendum with 48 hours' prior written notice to you for any reason. |
| f. Termination by us with cause | 13 and 14 | We may terminate the SRU Addendum for any breach of the SRU Addendum or the Franchise Agreement. |
| g. "Cause" defined- curable defaults | 13 | Any violation of the provisions of the Franchise Agreement constitutes a breach of the SRU Addendum. |
| h. "Cause" defined –non-curable defaults | 13 | Any violation of the provisions of the Franchise Agreement constitutes a breach of the SRU Addendum. |
| i. Franchisee's obligations on | Not applicable | |
| termination/non-renewal | ||
| j. Assignment of contract by us | Not applicable | |
| k. | Not applicable | |
| "Transfer" by franchisee-defined | ||
| a.Our approval of transfer by | Not applicable | |
| franchisee | ||
| m. Conditions for our approval of | Not applicable | |
| transfer |
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 has the right to terminate the Satellite Retail Unit (SRU) Addendum without specifying a cause. This means Cinnabon can end the addendum for any reason they deem appropriate.
This termination right is significant for a prospective franchisee because it provides Cinnabon with considerable flexibility. Cinnabon can terminate the SRU Addendum, even if the franchisee is in full compliance with the agreement. This could happen due to a change in Cinnabon's overall business strategy, a decision to discontinue SRUs, or any other reason Cinnabon considers relevant.
The FDD states that Cinnabon must provide the franchisee with 48 hours' prior written notice before terminating the SRU Addendum without cause. While this does provide a short window for the franchisee to prepare, it offers limited protection against the potential impact of such a termination. Franchisees should carefully consider this termination clause and its potential implications for their business operations and investment.
It is important to note that this termination right applies specifically to the SRU Addendum. Cinnabon can also terminate the SRU Addendum with cause if the franchisee breaches the SRU Addendum or the Franchise Agreement. The FDD defines 'cause' broadly, stating that any violation of the Franchise Agreement constitutes a breach of the SRU Addendum.