Does Cinnabon require all Owners to sign the Personal Covenants in Schedule B?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
A. Owners of Equity. If you are a corporation, limited liability company, partnership, or other entity (collectively, an "Entity"), all of your owners of a legal and/or beneficial interest in the Entity, as such owners may be added or removed from time to time in accordance with Section 16 (Transfer) (the "Owners") must execute the "Personal Covenants" that is attached in Schedule B (the "Personal Covenants") and the "Guaranty of Payment and Performance" that is attached in Schedule C (the "Guaranty"). By executing the Personal Covenants and Guaranty, each Owner will be bound by the provisions contained in this Agreement, including the restrictions set forth in Section 15 (Confidential Information; Restrictive Covenants). Further, a violation of any of the provisions of this Agreement, by any Owner will also constitute a violation by you of your obligations under this Agreement. You represent that the individuals and Entities listed as "Owners" on Schedule A are currently your sole Owners. If you add or remove Owners in accordance with Section 16 (Transfer), we may unilaterally modify the list of Owners in Schedule A to reflect your then-current ownership structure.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, if the franchisee is an entity such as a corporation, limited liability company, or partnership, all owners with a legal or beneficial interest in the entity must execute the Personal Covenants attached as Schedule B, as well as the Guaranty of Payment and Performance in Schedule C. By signing these documents, each owner agrees to be bound by the provisions in the Franchise Agreement, including the restrictions in Section 15 regarding Confidential Information and Restrictive Covenants.
This requirement ensures that all individuals with a stake in the Cinnabon franchise are personally liable for upholding the terms of the agreement. This includes adhering to confidentiality and non-compete clauses, which are critical for protecting Cinnabon's business model and proprietary information.
Furthermore, any violation of the Franchise Agreement by an owner will be considered a violation by the franchisee itself. This provision underscores the importance of ensuring that all owners are fully aware of and committed to complying with the franchise agreement. Prospective franchisees should carefully review these requirements and ensure that all owners are prepared to sign the necessary documents and abide by the terms outlined in the agreement.