x31 FRANCHISE DISCLOSURE DOCUMENT ISSUANCE DATE: APRIL 1,20442014 CINNABON, INC. A Washington corporation 200 Glenridge Point Parkway, Suite 200, Atlanta, Georgia 30342 (404) 255-3250 [email protected] www.cinnabon.com ©20432014 Cinnabon, Inc. All rights reserved. Cinnabon Franchise Disclosure Document o*i.Qi.aoi3v204.01.2014 CINNABON, INC. A Washington corporation 200 Glenridge Point Parkway, Suite 200 Atlanta, Georgia 30342 (404) 255-3250 [email protected] CINNABON www.cinnabon.com FRANCHISE DISCLOSURE DOCUMENT You will operate a Cinnabon® retail bakery. Cinnabon® bakeries are retail stores that sell fresh baked cinnamon rolls and related products. The total investment necessary to begin operation of a Cinnabon® Full Bakery franchise ranges from $142,3331&&D50 to $365,7003&L5Qfl. This total investment estimate for a Full Bakery includes a $30,000 initial franchise fee that must be paid to us. The total investment necessary to begin operation of a Cinnabon® Full Bakory with a Carvel®-Express franohiso inside itBakeiy ranges from $210,000 to $427,500. This total investment estimate for a Full Bakory includes a $30,000 initial franohiso foo that must be paid to us and a $7,500 initial franohiso foo that must ho piid to r.nrva\ Corporation in nnnnftfition with the Cnrvftl® Express franchise34.700 to $92,050. The total investment necessary to begin operation of a Cinnabon® Express Bakery ranges from $36,126 to $94,170. The total invostmont necessary to begin operation of a Cinnabon® Exprocs Bakory located in a new Schlotzsky's® Restaurant ranges from $24,564 to $34^3434.984. These total investment estimates for Express Bakeries include a $7,500 initial franchise fee that must be paid to us. These total investment estimates include your cost to purchase a designated POS System, which currently ranges from $3,100 for one register to $6,200 for two registers (the initial cost estimate includes software support and maintenance and hardware maintenance for the first year), that must be paid to our affiliate. This Disclosure Document summarizes certain provisions of your franchise agreement, territory agreement and other information in plain English. Read this Disclosure Document and all accompanying agreements carefully. You must receive this Disclosure Document at least 14 calendar-days before you sign a binding agreement with, or make any payment to, the franchisor or an affiliate in connection with the proposed franchise sale. Note, however, that no governmental agency has verified the information contained in this document. You may wish to receive your Disclosure Document in another format that is more convenient for you. To discuss the availability of disclosures in different formats, contact our sales department at 200 Glenridge Point Parkway, Suite 200, Atlanta, Georgia 30342 and 404-255- 3250 or [email protected]. The terms of your contract will govern your franchise relationship. Don't rely on the Disclosure Document alone to understand your contract. Read all of your contract carefully. Show your contract and this Disclosure Document to an advisor, like a lawyer or an accountant. Buying a franchise is a complex investment. The information in this Disclosure Document can help you make up your mind. More information on franchising, such as "A Consumer's Guide to Buying a Franchise," which can help you understand how to use this Disclosure Document, is available from the Federal Trade Commission. You can contact the FTC at 1-877-FTC-HELP or by writing to the FTC at 600 Pennsylvania Avenue, NW, Washington, D.C. 20580. You can also visit the FTC's home page at www.ftc.gov for additional information. Call your state agency or visit your public library for other sources of information on franchising. There may also be laws on franchising in your state. Ask your state agencies about them. Cinnabon Franchise Disclosure Document oi.Qi.aoi3waQ4.Q1,2014 The issuance date ofthis Franchise Disclosure Document is April 1, 30432014. Cinnabon Franchise Disclosure Document Qi.Qi.2oi3vaQ4.01.2014 STATE OO^ERPAGE Your state may haveafranohise law t^ franchise administrator before offering or selling in your state REGiSTRATiON OF A FRANCHISE OYASTATE OOES NOT MEAN THAT THE STATE REOOMMENOS THE FRANCHISE ORHAS^ERIFiEO THE INFORMATION IN THiS OiSOI^OSOREOOOOMENT Call the statefranohise administrator listed in Exhibit C to this Oisciosure Oocument for information about the franchisor or about franchising in ye^^^ state MAI^Y FRANCHISE AGREEMENTS OO^OTA^OWYC^ TO RENEW OI^CCNOiTI^^ AFTER THE INITIAL TERM EXPIRES YOO MAY HA^E TO SIGNANEW AGREEMENT WITH DIFFERENT TERMS ANO CONOITIONS IN OROER TO CONTINUE TO OPERATE YOOROOSINESS BEFORE YOO 80Y,CONSIOERWHATRIGHTS YOO HA^ETO RENEW YOOR FRANCHISE, IFANY^ANOWHATTERMSYOOMIGHTHA^ETOACCEPT IN OROER TO RENEW PleaseconsiderthefollowingRIS^FACTORS beforeyou buy this franchisee 1 THE FRANCHISE AGREEMENT ANOTERRITORY AGREEMENT PERMIT YOOTO ARBITRATE OR SOE ONI^Y IN GEORGIA OOT OF STATE ARBITRATION OR LITIGATION MAYFORCE YOO TO ACCEPTALESSFAVGRABLE SETTLEMENT FOR OISPOTES ITAtiSOMAYCOSTMORETOARBITRATEWITH OR SOE CINNABON IN GEORGIATHAN INYOOR HOME STATE CERTAIN STATES HA^E IDAWSTHAT SOPERSEOETHISREOOIREMENT SEE THE STATE AOOENOA TO THE FRANCHISE AGREEMENTAND THE TERRITORYAGREEMENT,ANO THE STATE AOOENOATO THEOISCtiOSOREOOCOMENT 2 THE FRANCHISE AGREEMENT ANO TERRITORY AGREEMENT STATE THAT GEORGIA I^W GOVERNS THESEAGREEMENTS THIS I^WMAYNOT PROVIDE THE S^ME PROTECTIONS ANO BENEFITS AS tiOCAID I^AW YOO MAY WANT TO COMPARE THESE I^WS E^ENTHOOGH THE FRANCHISE AGREEMENT PROVIDES THAT GEORGIA I^AWAPPOES^OCAI^ I^W MAYSOPERSEOE THIS REOOIREMENT IN YOOR STATE SEE THE STATE AOOENOA TO THE FRANCHISE AGREEMENT ANO TERRITORY AGREEMENT, ANO THE STATE AOOENOA TO THE OISCIDOSORE OOCOMENT 3 CINNABON GRANTS YOO NO TERRITORIAL RIGHTS OTHER THAN THOSE FOR THE PREMISES OF THE CINNABON BAKERY ONDER THE FRANCHISE AGREEMENT SEE ITEM^OF THIS DISCtiOSORE OOCOMENT CINNABON MAYCOMPETE WITH YOO BY ITS SAI^ES TO SOPERMAR^ETS, CONVENIENCE STORES ANO OTHER BOSINESSES 4 THERE MAYBE OTHER RIS^S CONCERNING THIS FRANCHISE The effective dates of this Franchise Oisclosure Oocument in the states with franchise registration laws in which we have sought registration appear on Attachments C^^onF^^^D^^ ^HEFO^OW^G APPLES TO TRANSACTIONS GO^RNEOBY THE MIOHIOAN FRANCHISE INVESTMENT ^AWON^ THE STATE OF MICHIGAN PROHIBITS CERTAIN ONFAIR PROVISIONS THAT ARE SOMETIMES IN FRANCHISE OOCOMENTS IF ANY OF THE FO^OWINO PROVISIONS ARE IN THESE FRANCHISE OOCOMENTS^THE PROVISIONS ARE ^OIO ANO CANNOT BE ENFORCED AOAINSTYOO Eaoh of thefoliowing prov^onsis void and unenforooabieif contained in any doouments relating foafranohise^ (a) Aprohibitionontherightofafranohiseeto^oinanassooiationoffranohisees. (b) Aregoirementthatafranohiseeassenttoarelease, assignment, novation, waiver, orestoppeiwhiohdeprivesafranohiseeofrightsand proteotion provided in this aot This shali notpreoludeafranohisee,afterenteringintoafranohiseagreernent,from settling any and aii oiaims. (o) Aprovision that permitsafranohisor to terminateafranohise prior to the expiration of its term except for good oause Good oaose shall include the failure of the franchisee to comply with any lawful provision of the franchise agreement and to cure such failure after being given written notice thereof andareasonable opportunity, which in no event need be more than 3Cdays, to cure such failure. (d) Aprovision that permitsafranchisor to refuse to renewafranchise without fairly compensating the franchisee by repurchase or other means for the fair market value at the time of expiration of the franchisee's inventory, supplies, equipment, fixtures^ and furnishings. Personalized materials which have no value to the franchisor and inventory, supplies, equi^ment,fixtures, and furnishingsnot reasonably required in the conductof the franchise business are not subject to compensation. This subsection applies only if^ (^theterm of the franchiseislessthan5yearsand(ii)thefranchiseeisprohibitedby the franchise or other agreement from continuing to conduct substantially the same business under another trademark, service mark, trade name, logotype, advertising, or other commercial symbol in the same area subsequent to the expiration of the franchise or the franchisee does not receive at least^months advance notice offranchisor's intent not to renewthe franchise (e) Aprovisionthatpermits the franchisor to refuse torenewafranchise on terms generally available to other franchisees of the same class or type under similar circumstances Thissection does not requirearenewal provision (f) Aprovisionrequiring that arbitration or litigation he conducted outside this stat^^ This shall not preclude the franchisee from entering into an agreement, at the time of arbitra^^ to conduct arbitration atalocation outside this state (g) ^provisionwhich permitsafranchisor to refuse to permitatransfer of ownership of a franchise, except forgood cause This subdivision does not prevent a franchisor from exercisingarightoffirstrefusaltopurchasethefranchise Good cause shall include,hut is not limitedto^ (i) The failure of the proposed transferee to meet the franchisor's thencurrent reasonable qualifications or standards ^ The fact that the proposed transferee isacompetitor of the franchisor or subfranchisor (iii) The unwillingness of the proposed transferee to agree in writing to comply with all lawful obligations. (iv) The failure of the franchisee or proposed transferee to pay any sums owing to the franchisor or to cure any default in the franchise