What relief is the arbitrator entitled to award in a dispute regarding the Cinnabon franchise agreement?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
The arbitrator has the right to award or include in his or her award any relief which he or she deems proper, including money damages (with interest on unpaid amounts from the date due), specific performance, injunctive relief, and attorneys' fees and costs, provided that
the arbitrator may not declare any Mark generic or otherwise invalid or, except as expressly provided in Section 19.1.F. (Waiver of Punitive Damages), award any special, consequential, exemplary, or punitive damages against either party (we and you hereby waiving to the fullest extent permitted by law, except as expressly provided in Section 19.1.F. below, any right to or claim for any special, consequential, exemplary, or punitive damages against the other).
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, the arbitrator in a dispute has broad authority to determine appropriate relief. This includes the ability to award money damages, with interest accruing on unpaid amounts from their due date. The arbitrator can also order specific performance, compelling a party to fulfill their obligations under the franchise agreement. Injunctive relief, which is a court order requiring a party to do or cease doing a specific action, is also within the arbitrator's power. Additionally, the arbitrator can award attorneys' fees and costs to the prevailing party.
However, there are limitations to the arbitrator's authority. The arbitrator cannot declare any of Cinnabon's marks generic or invalid. Furthermore, the arbitrator is generally prohibited from awarding special, consequential, exemplary, or punitive damages against either party. Both Cinnabon and the franchisee waive their rights to claim such damages to the fullest extent permitted by law.
This means that while a franchisee can potentially recover direct losses and legal expenses through arbitration, their ability to obtain additional compensation for indirect or exceptional harm is limited. This waiver of certain types of damages could impact the potential financial recovery in a dispute, making it important for prospective franchisees to carefully consider the implications and consult with legal counsel.