Under the Cinnabon franchise agreement, does the franchisee have any protected or exclusive rights?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
LLC | San Antonio | Texas | (214) 882-1414 | | | 2232 | Albert Restaurant Group, LLC | San Antonio | Texas | (214) 882-1414 | | | 2284 | Albert Restaurant Group, LLC | San Antonio | Texas | (214) 882-1414 | | | 2296 | Albert Restaurant Group, LLC | San Antonio | Texas | (214) 882-1414 | | | 6164 | Albert Restaurant Group, LLC | San Antonio | Texas | (214) 882-1414 | |
- 8. Section 3.1 (Initial Franchise Fee): The Initial Franchise Fee shall be equal to $5,500.
- 9. Section 3.2.A. (Royalty Fee):
The Royalty Fee shall be 6% of the Net Sales of the Franchised Business, payable each week on the Net Sales of the Franchised Business for the preceding week (or on any other basis stated in the Manuals or in our written notice to you).
10. Section 3.2.B. (Advertising Contribution):
The Advertising Contribution shall be in an amount we determine, in our sole discretion, which when combined with the Local Marketing Obligation (as specified in Section 10.1.E. (Local Marketing Obligation)) shall not exceed 5% of the Net Sales of the Franchised Business, payable each week on the Net Sales of the Franchised Business for the preceding week (or on any other basis stated in the Manuals or in our written notice to you).
- 11. Section 4.1 (Reserved Rights): The following provisions are added to Section 4.1 of the Agreement.
- A. No Protected Rights. You do not have any protected or exclusive rights under this Agreement.
- B. Our Reserved Rights. We and our affiliates reserve all rights that we do not expressly grant you in this Agreement. We and our affiliates have the right to conduct, or authorize third parties to conduct, any business activities, under any name, in any geographic area, and at
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, whether or not a franchisee receives protected or exclusive rights depends on the type of location. For Streetside Locations, Cinnabon grants a protected territory, referred to as an "Area of Protection," where the franchisee has limited exclusive rights. This area is defined as either a specified mile or block radius from the accepted location. The specific size and terms of this area are determined by Cinnabon and documented in a signed agreement, which includes a general release. If the franchisee relocates, the Area of Protection will be redefined for the new location.
However, this protection only applies to Streetside Locations, which include freestanding, inline, and endcap locations in city streets or shopping centers, excluding enclosed and open-air malls and outlet malls. For Other Locations, such as airports, amusement parks, big box stores, casinos, colleges, convenience stores, farmer's markets, military bases, malls, sports and entertainment venues, train stations, transportation centers, travel plazas, truck stops, universities, zoos, and Delivery Kitchens, franchisees do not receive protected rights. Cinnabon and its affiliates reserve the right to establish or license franchises and company-owned businesses offering similar products in these Other Locations, even within the Area of Protection of a Streetside Location.
Cinnabon also retains significant reserved rights, regardless of location type. These rights allow Cinnabon and its affiliates to conduct business activities under any name, in any area, and at any location, without providing compensation to the franchisee. This includes the right to establish franchises or company-owned businesses that offer similar products, sell products through alternative channels like supermarkets and e-commerce, and advertise anywhere. They can also acquire or merge with other entities, potentially converting the franchisee's business to a different name or system. This means that while a Streetside Cinnabon franchise may have some territorial protection, Cinnabon retains broad rights to operate and expand its brand through various channels and locations, potentially impacting the franchisee's business.