After the termination or expiration of the Cinnabon franchise agreement, what restrictions apply to a franchisee's use of Trade Secrets, according to the FDD?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
on of Rights After Your Default) and 17.5 (Other Remedies After Your Default) will not (i) be a defense for you to our enforcement of any other provision of this Agreement or waive or release you from any of your other obligations under this Agreement, (ii) be a defense at law or equity based on impossibility of your performance or any claim against us or our Approved Suppliers. (iii) constitute an actual or constructive termination of this Agreement, or (iv) be our sole or exclusive remedy for your default. You must continue to pay all fees and otherwise comply with all of your obligations under this Agreement following our exercise of any of these rights. If we exercise any of our rights under Section 17.5, we may thereafter terminate this Agreement without providing you any additional corrective or cure period, unless the default giving rise to our right to terminate this Agreement has been cured to our reasonable satisfaction.
18. OBLIGATIONS ON EXPIRATION OR TERMINATION
- 18.1 General Obligations. On expiration or termination of this Agreement for any reason, you must:
- A. Immediately cease using the System, including the Marks and any confusingly similar names, marks, commercial symbols, systems, insignia, symbols, color schemes, trade dress, designs, procedures, domain names, and methods. If you fail or refuse to make changes to the Franchised Business required to distinguish the Franchised Business from its former appearance, we have the right, in addition to all other remedies, to enter the Accepted Location and make the required changes on your behalf, and you must pay to us all costs and expenses we or our affiliates incur in making the changes, including interest from the date of demand, plus an administrative fee in an amount equal to 15% of the costs and expenses that we or our affiliates incur.
- B. Immediately return to us: (i) all hard copies and electronic copies (capable of being returned) of the Confidential Information and Trade Secrets, including the Manuals, together with
all copies of any of them;
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, upon expiration or termination of the franchise agreement, a franchisee must adhere to specific obligations regarding trade secrets. The franchisee must immediately cease using Cinnabon's System, including its marks, names, symbols, color schemes, trade dress, designs, procedures, domain names, and methods. If the franchisee fails to make the required changes to distinguish the business from its former appearance, Cinnabon has the right to enter the location and make those changes, with the franchisee bearing all costs and expenses, including a 15% administrative fee.
Furthermore, the franchisee is obligated to return all hard and electronic copies of Confidential Information and Trade Secrets, including the Manuals, and all other materials related to the operation of the franchised business. This includes erasing any digital copies from computer systems, email accounts, or other digital storage. The franchisee must also provide a certification confirming that all copies of confidential information and trade secrets have been returned or destroyed.
In addition to these immediate actions, the franchisee must comply with the restrictive covenants outlined in Section 15 of the Franchise Agreement, which pertains to Confidential Information and Restrictive Covenants. This means that even after the agreement ends, the franchisee is still bound by the terms governing the use and disclosure of Cinnabon's trade secrets and confidential information.