Regarding Cinnabon franchises offered and sold in Indiana, does the Franchise Agreement provision relieving both parties from liability for punitive damages apply?

According to Cinnabon's 2025 Franchise Disclosure Document, for franchises offered and sold in the state of Indiana, the provision in the Franchise Agreement that would typically relieve both Cinnabon and the franchisee from liability for punitive damages will not be enforced. This means that in Indiana, either party may be able to seek punitive damages from the other in the event of a dispute, notwithstanding any clause in the standard agreement to the contrary. Punitive damages are typically awarded to punish a party for particularly egregious behavior.

This modification is outlined in the Indiana Addendum within Item 23 of the FDD, which addresses receipts and specific legal considerations for that state. This addendum serves to ensure that the Cinnabon franchise agreement complies with Indiana law, which may offer different protections or impose different liabilities than the standard agreement, which is generally governed by Georgia law.

For a prospective Cinnabon franchisee in Indiana, this is a beneficial alteration. It means they are not waiving their right to seek punitive damages should Cinnabon engage in misconduct that harms their business. It's important for potential franchisees to understand these state-specific modifications, as they can significantly impact their rights and obligations under the franchise agreement. Franchisees should consult with a legal professional to fully understand the implications of this and other addenda.