Under what circumstances does Cinnabon have the option to purchase a Cinnabon franchisee's business?

According to the 2025 Cinnabon Franchise Disclosure Document, Cinnabon has the option to purchase a franchisee's business under specific circumstances, as detailed in Section 18.4 of the Franchise Agreement. Cinnabon may purchase the franchisee's goods related to the bakery at fair market value, excluding goodwill. Additionally, Cinnabon may purchase the Accepted Location if the franchisee owns it, or the franchisee's interest in any lease.

This provision grants Cinnabon the ability to take over a Cinnabon location, potentially when a franchisee is facing difficulties or when Cinnabon sees strategic value in acquiring the location. It's important to note that the purchase of goods is based on fair market value, which should protect the franchisee from being unfairly compensated. However, the exclusion of goodwill from the valuation could be a point of negotiation or concern for a franchisee, as goodwill often represents a significant portion of a business's value.

It is also important to note that these conditions are not applicable for an Express Bakery. A prospective franchisee should seek clarification from Cinnabon regarding the criteria and process Cinnabon uses to determine fair market value, as well as the circumstances under which Cinnabon is most likely to exercise this option.