Which state's law generally applies to all other Cinnabon disputes?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provisions | Section in Franchise Agreement | Summary |
|---|---|---|
| o. You must comply with our right of first refusal. p. If you operate a Co-Branded Bakery, the Co-Branded Agreement or Co-Branded Franchise are transferred at the same time. | ||
| FA: 16.4 (non-control transfers) | a. You give us prior written notice of the transfer. b. You pay all sums owed. c. You are not in default d. Transferee meets qualifications e. Transferee signs assignment and guaranty f. You and your guarantors and owners sign a general release. g. You remain liable for pre-Transfer obligations. h.You pay us a Transfer Fee. | |
| FA: 16.5 (related party transfers) | a. You give us prior written notice of the transfer. b. You are not in default c. Transferee meets qualifications d. Transferee assumes in writing the Franchise Agreement and the guaranty. e. You may not be in default under the Franchise Agreement. f. You pay us a Transfer Fee. g. You and your guarantors and owners must sign a general release and remain liable for pre-Transfer obligations | |
| n. Our right of first refusal to acquire your business | FA: 16.8 | We can match any offer for your Bakery or substantially all interest in your entity. |
| ES: 20.Q. | Above not applicable for an Express Bakery. | |
| o. Our option to | FA: 18.4 | We may purchase your Goods related to the Bakery at the fair |
| purchase your | market value (exclusive of good will) and may purchase your | |
| business | Accepted Location if you own it or your interest in any lease. | |
| ES: 20.U. | Above not applicable for an Express Bakery. | |
| p. Your death or disability | FA: 16.6 | Upon 180 days from your death or permanent incapacity you must transfer all rights and interests to buyer that complies with Transfer provisions, except no Transfer Fee will be due. |
| q. Non- | FA: 15.4 | No involvement in a competitive business (generally, similar types of |
| competition | businesses that offer products the same or similar to the Approved | |
| covenants | Products) anywhere. You may not divert or attempt to divert any | |
| during the | business or potential business, misuse vendor relationships, or | |
| term of the | perform, directly or indirectly, any other act injurious or prejudicial to | |
| franchise | the goodwill associated with the Proprietary Marks and the System. | |
| r. Non- competition covenants after the franchise is terminated or expires | FA: 15.4.B | For 12 months after expiration or termination, no involvement in a competitive business at the Accepted Location, within 3 miles of your Accepted Location, or within 3 miles of any Bakery; and no diverting or attempting to divert any business from any Bakery. |
| s. Modification of | FA: 8.3, 22.2 | No oral modifications, but we can change the Manuals. |
| the agreement | and 22.3 | |
| t. Integration/ merger clause | FA: 22.2 | Only the terms of the Franchise Agreement and related agreements are binding (subject to state law). Any representations or promises outside of the Disclosure Document and Franchise Agreement may not be enforceable. |
| u. Dispute | FA: 19.1 | Most disputes must be resolved by arbitration. |
| resolution by | ||
| arbitration or | ||
| mediation | ||
| v. Choice of forum | FA: 19.1 | Subject to state law, currently, arbitration or lawsuit must be in the metropolitan area of district court where our principal place of business is located (currently, Georgia). |
| w. Choice of law | FA: 15.6 and 22.5 | Subject to state law, Georgia law applies to all disputes except those related to the non-competition covenants, which will be governed by the laws of the state in which your Bakery is located. |
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, Georgia law generally applies to disputes arising from the franchise agreement. However, there is an exception: the laws of the state where the Cinnabon bakery is located will govern disputes related to non-competition covenants. This means that if a dispute arises over a franchisee's alleged violation of a non-compete agreement after the franchise terminates or expires, the laws of the state in which the bakery operated will be applied, not Georgia law.
This choice of law provision is fairly standard in franchising. Franchisors often select a 'home state' law to govern most contractual matters for consistency. However, issues like non-competes, which directly impact a franchisee's ability to work in a specific location, are often governed by local state law. This allows for the application of laws and precedents most relevant to the franchisee's business environment.
For a prospective Cinnabon franchisee, this means understanding both Georgia law (for general franchise agreement issues) and the laws of their own state (regarding non-competition). It would be prudent to consult with an attorney in their state to fully understand the implications of the non-compete provisions under local law. This is especially important if the franchisee anticipates potentially wanting to operate a similar business after their Cinnabon franchise agreement ends.