Can Cinnabon terminate the SRU Addendum without cause, and if so, how much notice is required?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in the SRU Addendum | Summary |
|---|---|---|
| a. Length of the SRU Addendum term | Not applicable | Length of term is dependent on Franchise Agreement term. |
| b. Renewal or extension of the term | Not applicable | |
| c. Requirements for franchisee to | Not applicable | |
| renew or extend | ||
| d. | 15 | You must give us 14 days' advance written notice. |
| Termination by franchisee | ||
| e. Termination by us without cause | 15 | We may terminate the SRU Addendum with 48 hours' prior written notice to you for any reason. |
| f. Termination by us with cause | 13 and 14 | We may terminate the SRU Addendum for any breach of the SRU Addendum or the Franchise Agreement. |
| g. "Cause" defined- curable defaults | 13 | Any violation of the provisions of the Franchise Agreement constitutes a breach of the SRU Addendum. |
| h. "Cause" defined –non-curable defaults | 13 | Any violation of the provisions of the Franchise Agreement constitutes a breach of the SRU Addendum. |
| i. Franchisee's obligations on | Not applicable | |
| termination/non-renewal | ||
| j. Assignment of contract by us | Not applicable | |
| k. | Not applicable | |
| "Transfer" by franchisee-defined | ||
| a.Our approval of transfer by | Not applicable | |
| franchisee | ||
| m. Conditions for our approval of | Not applicable | |
| transfer |
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, Cinnabon has the right to terminate the Satellite Retail Unit (SRU) Addendum without cause. If Cinnabon chooses to terminate the SRU Addendum without cause, they must provide the franchisee with 48 hours prior written notice. This means that Cinnabon can end the agreement for any reason, provided they give the franchisee two days' notice.
This ability to terminate without cause is a significant consideration for prospective franchisees. While the franchisee would likely have invested time and resources into setting up and operating the SRU, Cinnabon retains the flexibility to end the agreement relatively quickly. This could create uncertainty for the franchisee's business operations and revenue projections.
It is important to note that Cinnabon can also terminate the SRU Addendum with cause if the franchisee breaches either the SRU Addendum or the Franchise Agreement. This is a standard provision in franchise agreements, allowing the franchisor to terminate the agreement if the franchisee fails to meet their obligations. The definition of 'cause' includes any violation of the Franchise Agreement, meaning a wide range of actions could trigger termination.
Prospective franchisees should carefully consider the implications of Cinnabon's termination rights and ensure they understand the conditions under which the SRU Addendum can be terminated. Understanding these terms is crucial for assessing the risks and rewards associated with operating a Cinnabon SRU.