During the term, is a Cinnabon franchisee allowed to divert business from the Franchised Business?

Based on the 2025 Cinnabon Franchise Disclosure Document, Section 1.1, as amended, grants franchisees a non-exclusive license to operate a Cinnabon business. This means Cinnabon may license other franchisees or operate company-owned stores nearby. However, the franchisee is generally restricted to operating the Franchised Business only at the location specified in Schedule A, referred to as the "Accepted Location." An exception exists if Cinnabon approves the franchisee to operate a satellite retail unit (SRU) at a location they specify, which would then be considered part of the Franchised Business.

For franchisees considering a co-branded Cinnabon Swirl business, Section 1.1 is further amended to specify that the Franchised Business must be operated at the Accepted Location in conjunction with a Carvel franchised business. This co-branded franchise must be operated under a separate agreement with Carvel Franchisor SPV LLC and primarily identified by the CINNABON SWIRL™ Mark.

Section 15.4 defines a "Competing Product" as any products or services that are the same as or similar to any of the Approved Products, or more specifically, any cinnamon rolls or cinnamon-based products. While the FDD excerpts do not explicitly state whether a franchisee can operate another business that offers "Competing Products," the restrictive covenant in Section 15.4 suggests that such activities might be restricted. A prospective franchisee should seek clarification from Cinnabon regarding the extent to which they are restricted from engaging in other business ventures, particularly those involving similar products, during the franchise term.