Under what conditions might Cinnabon or its affiliate lease an SRU to a qualified Cinnabon franchisee?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
We or our affiliate, in our or their sole discretion and subject to availability, may lease to qualified franchisees an SRU as an additional selling location within the mall, airport, enclosed building or other retail location where an existing Bakery is located. This lease is controlled by the terms of an SRU Lease Agreement between you and us or our affiliate. See Items 6 and 8.
The opportunity to participate in our SRU Program which allows for the operation of a secondary selling point apart from the Bakery is offered at our sole discretion. You must comply with the terms and conditions of the then-current SRU Addendum that you execute with us and, if you lease the SRU from us or our affiliate, the then-current SRU Lease Agreement that you execute with us or our affiliate. The SRU Addendum and SRU Lease Agreement, and your rights to operate and lease the SRU, can be terminated by us or our affiliate upon 48 hours' written notice. You may terminate the SRU Addendum and SRU Lease Agreement, and cease operating the SRU, by providing us or our affiliate with two weeks' written notice. However, if you terminate the SRU Addendum and SRU Lease Agreement within the first 12 months, you will be responsible for rental payments through the entire 12-month period.
If you operate an SRU, you must provide us an executed copy of the Lease for the SRU Location prior to the commencement of operation of the SRU.
SRU Acquisition. If you operate an SRU, you must purchase or lease the SRU and related equipment from our designated Supplier, which may be us or one of our affiliates. If you lease the SRU, you must execute a lease for the SRU in the form designated by the Supplier (the "SRU Lease Agreement"), pay any initial and ongoing required fees under the SRU Lease Agreement, and provide us with an executed copy of the SRU Lease Agreement. You must obtain our written approval for the design of, and any initial or subsequent modifications to, the SRU.
You agree to operate the SRU in strict compliance with the Standards, except that the SRU is permitted to sell a limited selection of Approved Products.
A non-interest bearing deposit of $1,000 shall be paid by Lessee to Lessor upon execution of this Agreement ("Security Deposit").
Lessor reserves the right to terminate this Agreement and recover the SRU regardless of any remaining term(s) of the Lease Agreement.
Source: Item 10 — Financing (FDD page 66)
What This Means (2025 FDD)
According to the 2025 Cinnabon Franchise Disclosure Document, Cinnabon or its affiliate may lease a Satellite Retail Unit (SRU) to qualified franchisees under certain conditions. The decision to lease an SRU is at Cinnabon's or its affiliate's sole discretion and depends on the availability of SRUs. To be eligible, the franchisee must be qualified, and the SRU will be an additional selling location within a mall, airport, enclosed building, or other retail location where an existing Cinnabon Bakery is already located. The terms of the lease are governed by an SRU Lease Agreement between the franchisee and Cinnabon or its affiliate.
This arrangement allows Cinnabon to expand its presence in high-traffic areas without the full investment of a traditional bakery. For a franchisee, leasing an SRU can be an opportunity to increase revenue and brand visibility within their existing territory. However, the franchisee must adhere to the terms of the SRU Lease Agreement and the SRU Addendum, which can be terminated with relatively short notice (48 hours by Cinnabon or its affiliate, or two weeks by the franchisee). If the franchisee terminates the agreement within the first 12 months, they are responsible for rental payments through the entire 12-month period.
Furthermore, franchisees operating an SRU must provide Cinnabon with an executed copy of the lease for the SRU location before commencing operations. They are also required to purchase or lease the SRU and related equipment from Cinnabon's designated supplier, which may be Cinnabon itself or one of its affiliates. The design and any modifications to the SRU must receive written approval from Cinnabon, and the franchisee must operate the SRU in strict compliance with Cinnabon's standards, although the SRU is permitted to sell a limited selection of approved products. Additionally, a security deposit of $1,000 is required upon execution of the lease agreement.
Cinnabon retains significant control over the SRU, including the right to terminate the lease and recover the SRU, regardless of any remaining terms in the lease agreement between the franchisee and the landlord. This highlights the importance of carefully reviewing the SRU Addendum and SRU Lease Agreement to understand the obligations and potential risks involved in operating an SRU. The franchisee is also responsible for indemnifying Cinnabon against any losses, claims, or expenses arising from the use, condition, or operation of the SRU, including the sale of food products.