After the termination or expiration of my Cinnabon franchise, what is the geographic limit of the non-compete?
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. |
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, if your franchise is terminated or expires, you are subject to a non-compete covenant for 12 months. This prevents you from involvement in a competitive business at the Accepted Location, within 3 miles of your Accepted Location, or within 3 miles of any Cinnabon Bakery. Additionally, you are prohibited from diverting or attempting to divert any business from any Cinnabon Bakery.
This non-compete agreement is designed to protect Cinnabon's market share and brand reputation by preventing former franchisees from directly competing with existing locations in a defined geographic area. The restrictions apply regardless of whether the termination was initiated by you or by Cinnabon, and they are in effect for a full year after the franchise agreement ends.
For a prospective franchisee, this means that upon exiting the Cinnabon system, you will need to avoid any business ventures that could be seen as competitive within the specified radius. This includes not only opening a similar bakery but also any business that offers products similar to Cinnabon's approved products. It is important to carefully consider these limitations when planning your future business activities after your franchise term ends to avoid potential legal issues with Cinnabon.
It is also important to note that the non-compete is governed by the laws of the state in which your Cinnabon Bakery is located, as indicated elsewhere in the FDD. This means that the enforceability and interpretation of the non-compete provisions can vary depending on the specific state laws. Therefore, it is advisable to consult with a legal professional to fully understand the implications of the non-compete in your particular state.