Cinnabon
Date of Incorporation: 1985
Franchising Since: 1986
Headquarters: Atlanta, Georgia
Country: U.S.
Description: Cinnabon Inc. is a wholly-owned subsidiary of Cinnabon International, Inc, which is a wholly-owned subsidiary of Focus Brands Inc.
Franchise Offer: 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 Microbakery is where the franchisee will produce and sell only selected Cinnabon products.
Financial Assistance: Cinnabon Inc. does not offer financing for trade fixtures, opening inventory, or any other purpose. In certain circumstances, Cinnabon Inc. will permit the franchisee to pay some of the Initial Franchise Fee on the due date that they and Cinnabon Inc. negotiate. In this case, the franchisee must sign a promissory note. Under this note, the franchisee will not pay any interest unless they default on the note, at which time they must pay interest at 12% per year. Cinnabon Inc. does not require any security interest under this note. Cinnabon Inc. may refer a franchisee to leasing or financing companies not affiliated with Cinnabon Inc.
Training and Assistance: If the franchisee is an individual and will act as the full-time manager of the Bakery, they and any other persons the franchisor designates must attend and successfully complete the basic Cinnabon Bakery Manager Training Program. The franchisor may periodically make available to the franchisee and their employees, additional training programs that the franchisor chooses to conduct. Attendance at these training programs may be mandatory. The Cinnabon Full Bakery In-Store training program lasts for 10 to 17 days in a regionally approved live training bakery/location. It is considered the first step in a two step training process. The second step is to attend Focus Brands University, a five-day Business Management course. The franchisee must successfully complete Focus Brands University and In-line training before the Franchisee can open their Bakery.
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 Microbakery 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 certain requirements are meet. The fee for renewal is the then-current initial franchise fee
Obligations and Restrictions: The franchisee must personally supervise the operation of the Bakery, unless the franchisee otherwise permits in writing. 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.
Total Number of Units: Over 760 units.
Investment Tables:
Initial Investment for Full Bakery:
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $30,000 | $30,000 |
| Real Estate | Varies | Varies |
| Leasehold Improvements | $80,000 | $120,000 |
| Furniture, Fixtures, Equipment and Signs | $62,000 | $90,000 |
| Initial Training | $1,000 | $7,000 |
| Opening Supplies | $6,200 | $14,000 |
| Insurance | $2,000 | $5,000 |
| Utility Deposits | N/A | N/A |
| Business Licenses and Professional Fees | $6,000 | $10,000 |
| Additional Funds - 3 Months | $5,000 | $5,000 |
| Grand Opening Advertising | $0 | $3,000 |
| Total | $192,200 | $284,000 |
Initial Investment for Cinnabon Microbakery:
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $15,000 | $15,000 |
| Real Estate | Varies | Varies |
| Leasehold Improvements | $15,000 | $20,000 |
| Furniture, Fixtures, Equipment and Signs | $62,000 | $90,000 |
| Initial Training | $1,000 | $7,000 |
| Opening Supplies | $3,000 | $10,000 |
| Insurance | $2,000 | $5,000 |
| Utility Deposits | N/A | N/A |
| Business Licenses and Professional Fees | $1,500 | $5,000 |
| Additional Funds - 3 Months | $5,000 | $5,000 |
| Total | $108,500 | $157,000 |
Ongoing Fees:
| Name of Fee | Amount |
|---|---|
| Royalty | 6.0% of Gross Sales |
| Advertising Contribution | For mall locations, currently, 1.5% of Gross Sales but the franchisor may adjust this amount up to 3.0% of Gross Sales. For non-mall locations, currently 3.0% of Gross Sale |
| EFT NSF Fee | 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 |
| Consulting Fee | $500 per day |
| Adulteration, Dilution or Failure of Sanitation Inspection Fee | Expenses, including attorneys' fees, and inspection fees of up to $5,000 per visit |
| Interest | Lesser of maximum legal interest rate, or 12% per year |
| Taxes | Franchisor’s Cost |
| Advances | Franchisor’s Cost |
| Relocation Extension Fee | $1,000 per year of extension on Term |
| Transfer Fee | $7,500 for a Full Bakery; $5,000 for a Cinnabon Microbakery |
| Renewal Fee | Then-current initial franchise fee |
| Liquidated Damages | The amount of Royalty that the franchisee owed during the past 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, multiplied by 36. |
| Appraiser's Fee | 50% of appraiser's fee |
| Indemnification of Franchisor | Franchisor’s Cost |
| Attorney’s Fees | Franchisor’s Cost |
| Supplier Product Testing Fee | Cost of testing and inspection |
| Reinstatement Fee | $2,500 |
| Audit | Cost of Audit |
Date of FDD: 2008
The above information has been compiled from the FDD of Cinnabon along with online sources.
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