Cinnabon Franchise Cost & Fees
Date of Incorporation: 1985
Franchising Since: 1986
Headquarters: Atlanta, Georgia
Business Description: Cinnabon Inc., the franchisor, is a wholly-owned subsidiary of Cinnabon International, Inc., which is a wholly-owned subsidiary of Focus Brands Inc. In addition to franchising, the franchisor also sells products to wholesale accounts that offer Cinnabon products at retail, such as supermarkets, convenience stores, club stores and other similar retail outlets and (ii) unaffiliated branded restaurants and retail stores that it permits to sell one or more Cinnabon branded products.
Franchise Offer: Franchisees operate a Cinnabon retail bakery. Cinnabon bakeries are retail stores that sell fresh baked cinnamon rolls and related products. There are two types of franchises offered:
- Cinnabon Full Bakery is where the franchisee will produce and sell a full range of Cinnabon products.
- Cinnabon Express Bakery is where the franchisee will produce and sell selected Cinnabon products.
Financial Assistance: Cinnabon Inc. may refer franchisees to leasing or financing companies not affiliated with Cinnabon. Cinnabon Inc. and affiliates receive no fees or other financial benefits from any lender for the franchisee’s financing. Currently, Cinnabon will not guarantee the franchisee’s note, lease, or obligation, for any lender, or any other person or entity. Cinnabon does participate in the SBA's Franchise Registry Program, and will modify the Franchise Agreement to permit the franchisee to give the SBA or an SBA-approved lender a security interest in the Bakery.
Training and Assistance: If Cinnabon determines that the franchisee does not have sufficient restaurant experience, he/she may be required to complete an internship in an existing Cinnabon Bakery in addition to the training program. If the franchisee is an individual and will act as the full-time manager of the Bakery, he or she and any other persons the franchisor designates must attend and successfully complete the basic Cinnabon Bakery Manager Training Program (except Express Bakeries are required to send only one individual that will act as the Certified Bakery Manager). The Full Bakery training program (operations based training known as WOW University and Focus Brands University) lasts for 10 to 12 days in the corporate training facility in Atlanta, Georgia or a regionally approved live training Bakery. Cinnabon also may periodically make available to the franchisee or employees, additional training programs that Cinnabon, in its discretion, choose to conduct. Cinnabon may also periodically conduct a conference, convention, program, or training session.
Territory: The Franchise Agreement does not give the franchisee any territorial rights or protections in any geographic area. The Franchise Agreement licenses the franchisee to manufacture and sell Cinnabon products at retail only from a specific Full Bakery or Cinnabon Express Bakery location that Cinnabon Inc. accepts.
Term of Agreement and Renewal: The term of the franchise agreement is 20 years with an option to renew for an additional 20 years if renewal requirements are met. For an Express addendum, the length of the franchise term is five years with an option to renew for an additional five years if renewal requirements are met.
Obligations and Restrictions: The franchisee must personally supervise the operation of the Bakery, unless the franchisee otherwise permits in writing. Franchisees must devote the necessary time and their best efforts for the proper and effective operation of the Bakery. The franchisee must offer and sell all services, products, and programs that the franchisor requires the franchisee to sell and that are part of the Cinnabon System, or that the franchisor incorporates into the Cinnabon System in the future. The franchisor may add to, delete from, or modify the services, products, and programs that the franchisee can and must offer.
Estimated Number of Units: 1,220
|Name of Fee||Low||High|
|Initial Franchise Fee||$30,000||$30,000|
|Equipment, Fixtures, Furniture, Menu Boards, Graphics||$40,000||$75,000|
|Architect and Business Licenses||$7,500||$10,000|
|Additional Funds (3 months)||$10,000||$10,000|
|Grand Opening Advertising||$3,000||$3,000|
|Estimated Total (excluding Real Estate)||$180,050||$385,500|
|Name of Fee||Low||High|
|Initial Franchise Fee||$7,500||$7,500|
|Equipment, Fixtures, Furniture, Menu Boards, Graphics||$13,500||$40,000|
|Additional Funds (3 months)||$0||$3,000|
|Grand Opening Advertising||$1,000||$3,000|
|Estimated Total (excluding Real Estate)||$34,700||$92,050|
Express Bakery in a New Schlotzsky’s Restaurant
|Name of Fee||Low||High|
|Initial Franchise Fee||$7,500||$7,500|
|Equipment, Fixtures, Furniture, Menu Boards, Graphics||$10,948||$10,948|
|Additional Funds (3 months)||$0||$1,500|
|Grand Opening Advertising||$0||$0|
|Estimated Total (excluding Real Estate)||$24,564||$34,984|
|Type of Fee||Amount|
|Royalty||For Full Bakeries, 6.0% of Net Sales;
For Express Bakeries, the then current price per case of freezer to oven ("FTO") rolls or other approved proprietary Cinnabon products the franchisee purchases from Cinnabon or the designated supplier.
|Advertising Contribution||For Full Bakeries, currently, 1.5% of Net Sales but we may adjust this amount up to 3% of Net Sales (this fee does not apply to Express Bakeries).|
|Promotions||Costs to purchase, lease and install all materials necessary for promotional campaigns, including counter cards, posters, banners, signs, photographs, give-away items and gift cards. Cinnabon may charge franchisees its costs plus a reasonable administrative fee.|
|Polling Service Recurring Fee||Not to exceed $100 per month.|
|Credit Card Fees||Equipment costs and set up fees estimated to be up to $700 per terminal. Transaction fees estimated to be from 2.5% to 5.0% of transaction amounts. Other fees may apply depending on the vendor used for credit card processing.|
Gift Card and Loyalty Card Fees
|Equipment costs and set up fees estimated to be up to $500 if not able to be tied into a credit card terminal purchased from Credit Card provider or tied into the POS System.|
|EFT NSF Fee||Our out-of-pocket costs and an administrative fee.|
|Replacement Manager Initial Training Fee||Up to $500 per trainee.|
|On-Site Training and Assistance||$50 per hour plus trainers' expenses (this fee does not apply to Express Bakeries).|
|Consulting Fee||$500 per day (this fee does not apply to Express Bakeries).|
|Training Cancellation Fee||Cinnabon's out of pocket costs.|
|Adulteration, Dilution or Failure of Sanitation Inspection Fee||Cinnabon’s expenses, including attorneys' fees, and inspection fees of up to $5,000 per visit.|
|Interest||1% per month or maximum legal interest rate.|
|Relocation Extension Fee||Another initial fee of $1,000 per year of extension on term (this fee does not apply to Express Bakeries).|
|SRU Fees||$500 initial fee.
$750 training fee.
Monthly rental fee of 8% of Net Sales up to the maximum monthly rent for the unit (currently $1,571.15 per five week month and $2,423.10 for a baking SRU).
$1,000 refundable security deposit.
Actual shipping costs to and from the Bakery estimated to be between $1,500 and $5,000
Actual cost for optional modular add-ons, if any.
|Transfer Fee||50% of the then-current initial franchise fee for the type of Bakery the franchisee will operate; if it is a transfer to a related party, 10% of the then-current Initial Franchise Fee for the type of Bakery the franchisee will operate;
$2,500 for transfers under the Territory Agreement.
|Renewal Fee||10% of the then-current initial franchise fee for the type of Bakery the franchisee will operate.|
|Liquidated Damages (Full bakery)||The average monthly amount of Royalty that the franchisee owed Cinnabon during the past 36 months times the lesser of remainder of the term of the Franchise Agreement or 36 months. If less than 36 months have passed since opening and termination, the amount will be the average monthly Royalty during the time between opening and termination, times the lesser of remainder of the term of the Franchise Agreement or 36 months.|
|Liquidated Damages (Express bakery)||The average amount the franchisee paid per month to purchase Proprietary Products and Supplemental Products during the past 36 months times the lesser of remainder of the term of the Franchise Agreement or 36 months. If less than 36 months have passed since opening and termination, the amount will be the average amount the franchisee paid per month to purchase Proprietary Products and Supplemental Products during the time between opening and termination, times the lesser of remainder of the term of the Franchise Agreement or 36 months.|
|Appraiser's Fee||50% of appraiser's fee (this fee does not apply to Express Bakeries)|
|Indemnification of Cinnabon||Cinnabon’s cost.|
|Attorneys' Fees||Cinnabon's cost.|
|Supplier/Product Evaluation Fee||Cost of supplier/product evaluation process.|
|Reinstatement Fee||10% of the amount of the then-current initial franchise fee for the type of Bakery the franchisee will operate.|
|Audit||Cost of audit.|
|Late Fee for reports, financial statements or tax returns||$100 per day.|
The above information has been taken from the FDD of Cinnabon. Year of FDD: 2014
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