Can Cinnabon require franchisees to purchase Goods from a single designated source, and can this source include Cinnabon or its affiliates?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
ees for any of these items. The availability and terms of financing will depend on factors like the availability of financing generally, your credit worthiness, collateral you pledge, policies of your lending institution, and economic conditions in your area.
ITEM 8
RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES
Required Purchases. We have the right to require that Approved Products, other products, Proprietary Ingredients, supplies (including chemicals), furniture, fixtures, equipment, and services (collectively, "Goods") that you purchase for resale or purchase or lease for use in your Bakery: (i) meet specifications that we establish from time to time; (ii) be a specific brand, kind, or model; (iii) be purchased or leased only from Approved Suppliers; (iv) be purchased or leased only from a single source that we designate (which may include us or our affiliates or a buying cooperative organized by us or our affiliates);
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 59–63)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, Cinnabon has the right to mandate that franchisees purchase or lease various items, referred to as "Goods," from specific sources. These Goods include Approved Products, other products, Proprietary Ingredients, supplies (including chemicals), furniture, fixtures, equipment, and services used for resale or in the bakery. Cinnabon can require these Goods to meet their established specifications, be of a specific brand, kind, or model, and be purchased or leased exclusively from Approved Suppliers.
Specifically, Cinnabon can designate a single source for these Goods, which may include Cinnabon itself, its affiliates, or a buying cooperative organized by them. This means a franchisee might be obligated to purchase all required items from Cinnabon or a company they control. Cinnabon also retains the right to add or change Approved Suppliers at any time, giving them considerable control over the supply chain.
For a prospective franchisee, this means that Cinnabon has significant control over where they can source essential products and supplies. While this ensures consistency and quality, it also limits the franchisee's ability to negotiate prices or find alternative suppliers. It is important to note that Cinnabon and its affiliates reserve the right to become an Approved Supplier or the only Approved Supplier for any Goods in the future. This could impact the franchisee's costs and potentially increase their reliance on Cinnabon for supplies. Franchisees should carefully consider these restrictions and their potential financial implications before investing in a Cinnabon franchise.