Under what circumstances will Cinnabon charge a franchisee for inspection costs?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
rch out and destroy any adulterated, diluted, or contaminated Approved Products, eliminate their source, and remedy all unsanitary, unsafe, or otherwise hazardous conditions present. You may not resume operation of the Franchised Business until our laboratory analysis of your Approved Products or inspection of your Franchised Business, as applicable, demonstrates compliance with all applicable Laws and Standards. You must promptly implement any remedial measures we require to cure the default. If we conclude through any examination, analysis, and/or inspection that the Approved Products have been adulterated in any way or that your Franchised Business is not in compliance with applicable Laws, you shall, upon demand, reimburse us for all reasonable expenses connected with any such examination, analysis, or inspection under this Agreement (including reasonable product analysis fees).
- B. Additional Remedies. If: (i) we determine that a violation of Section 12.4.A. (Suspension of Operations) has occurred and that you have committed a similar violation within the one-year period before the date of the inspection or analysis; (ii) you fail or refuse to comply with any or all of the remedial measures we require; (iii) you fail to provide us with full cooperation in the course of any inspection or analysis we conduct; or (iv) we determine that there has been any repetition during the Term of any occurrence under Section 12.4.A., then you will pay us a fee for the inspection or analysis in the amount of $5,000; plus the travel and living expenses of our inspectors or representatives and any other expenses we incur in connection with this Section, including our attorneys' fees.
- C. Remedies Not Exclusive. The remedies stated in this Section 12.4 are in addition to, and not in substitution of, any other remedies stated in this Section 12.4 or elsewhere in this Agreement.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, franchisees may be charged for inspection costs under specific circumstances related to violations and cooperation with inspections.
Specifically, Cinnabon may charge a $5,000 fee, along with travel and living expenses for inspectors, attorneys' fees, and other related expenses, if any of the following occur: (i) Cinnabon determines that a franchisee has violated Section 12.4.A (Suspension of Operations) and has committed a similar violation within the past year; (ii) the franchisee fails or refuses to comply with required remedial measures; (iii) the franchisee does not fully cooperate during an inspection or analysis; or (iv) Cinnabon determines that a violation under Section 12.4.A has been repeated during the term of the agreement.
These inspection costs are in addition to any other remedies Cinnabon may pursue, including termination of the Franchise Agreement under Section 17. Cinnabon also reserves the right to charge non-compliance fees, ranging from $25 to $500 per violation, for failing to comply with any standards or provisions of the agreement. These fees can be specified in the manuals or in writing, modified over time, charged repeatedly for ongoing non-compliance, and may vary based on the severity and frequency of the defaults, with increases limited to the Allowed Adjustment in any calendar year.
It is important for prospective Cinnabon franchisees to understand these conditions, as they highlight the importance of adhering to operational standards and maintaining open communication with the franchisor to avoid incurring additional costs. Franchisees should familiarize themselves with Section 12.4.A of the franchise agreement, which covers suspension of operations, to fully understand the triggers for inspection cost charges.