Under what conditions can Cinnabon terminate the Satellite Retail Unit Lease Agreement with cause?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
isability of franchisee | | | | q. Non-competition covenants | Not applicable | | | during the term of the franchise | | | | r. Non-competition covenants after | Not applicable | | | the franchise is terminated or | | | | expires | | | | s. | Not applicable | | | Modification of the agreement | | | | t. | Not applicable | | | Integration/merger clause | | | | u. Dispute resolution by | Not applicable | | | arbitration or mediation | | | | v. Choice of forum | Not applicable | | | w. | Not applicable | | | Choice of law | | |
SATELLITE RETAIL UNIT LEASE AGREEMENT
| Provision | Section in the SRU Lease Agreement | Summary |
|---|---|---|
| a. Length of the SRU Lease | 3 | Terminates when lease with landlord terminates or |
| Agreement term | Franchise Agreement terminates | |
| b. Renewal or extension of the term | Not applicable | |
| c. Requirements for franchisee to | Not applicable | |
| renew or extend | ||
| d. Termination by franchisee | 14 | You must give two weeks advance written notice. In the event you terminate the SRU Lease Agreement prior to the passage of 12 months, you will be responsible for rental payments for the entire 12 month period. |
| e. T |
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, Cinnabon can terminate the Satellite Retail Unit (SRU) Lease Agreement with cause if the franchisee violates any provision of the Franchise Agreement. The FDD specifies that any violation of the Franchise Agreement constitutes a breach of the SRU Lease Agreement, providing grounds for termination. This applies to both curable and non-curable defaults.
This means that a Cinnabon franchisee must adhere strictly to the terms outlined in the Franchise Agreement to avoid potential termination of their SRU Lease Agreement. Common examples of violations could include failure to meet quality standards, non-payment of royalties, or unauthorized transfer of ownership. Because any violation, whether it can be fixed or not, is grounds for termination, franchisees must maintain diligent compliance.
It is important to note that the SRU Addendum also contains similar stipulations. Cinnabon may terminate the SRU Addendum for any breach of the SRU Addendum or the Franchise Agreement. Again, any violation of the provisions of the Franchise Agreement constitutes a breach of the SRU Addendum, and this applies to both curable and non-curable defaults. Therefore, franchisees should carefully review both the Franchise Agreement and the SRU Addendum to fully understand their obligations and avoid actions that could lead to termination.