Under what circumstances is a party NOT entitled to recover special, consequential, exemplary, or punitive damages under the Cinnabon agreement?

According to the 2025 Cinnabon Franchise Disclosure Document, both Cinnabon and the franchisee generally waive the right to recover special, consequential, exemplary, or punitive damages from each other. This means that in most disputes arising under the Franchise Agreement, neither party can seek these types of damages, which go beyond direct compensation for losses and are intended to punish the wrongdoer or deter future misconduct.

However, there are specific exceptions to this waiver. Cinnabon retains the right to seek these damages in cases involving the franchisee's obligation to indemnify Cinnabon for third-party claims, infringement of Cinnabon's intellectual property, and breach of obligations related to the protection of confidential information and trade secrets. These exceptions are designed to protect Cinnabon's brand, system, and proprietary information, which are critical to the franchise's success.

The FDD also notes some state-specific exceptions to this waiver. For example, the agreement states that the provision requiring franchisees to waive their right to collect exemplary or punitive damages may not be enforceable under North Dakota law. Similarly, for franchises offered and sold in Indiana, the provisions relieving both parties from liability for punitive damages will not apply. Franchisees should consult with legal counsel to understand how these waivers and exceptions apply in their specific jurisdiction.