Cinnabon Franchise Cost & Fees

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Description

Year Business Began: 1985 Franchising Since: 1986 Headquarters: Atlanta, Georgia Estimated Number of Units: 1,465 Franchise Description: Cinnabon Inc., the franchisor, is a wholly-owned subsidiary of Cinnabon International, Inc., which is a wholly-owned subsidiary of Focus Brands Inc. 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: 1. Cinnabon Full Bakery is where the franchisee will produce and sell a full range of Cinnabon products. 2. Cinnabon Express Bakery is where the franchisee will produce and sell selected Cinnabon products. Training Overview: If the franchisor determines that the franchisee does not have sufficient restaurant experience, he/she may be required to complete an internship in an existing Bakery in addition to the training program. If franchisees are an individual and will act as the full-time manager of the Bakery or if this is their first Bakery, they and at least one other person the franchisor designates must attend and successfully complete, to the franchisor’s satisfaction, the basic Cinnabon Bakery Manager Training (BMT) Program (except Express Bakeries are required to send only one individual). If franchisees are an individual but will not act as the full-time manager and they have previously successfully completed the BMT, or if franchisees are a corporation, partnership, limited liability company, or other entity, their Manager, at least one other of their employees and any other persons the franchisor designates, must attend and successfully complete, to its satisfaction, the BMT Program (except Express Bakeries are required to send only one individual). The Bakery training program (operations based training known as WOW University and Focus Brands University) lasts for 10 to 12 days in the franchisor’s training facility in Atlanta, Georgia or a regionally approved live training Bakery. To facilitate the opening of the Bakery, the franchisor will send one or more of its representatives to the Bakery, at its expense, for a minimum of 2 days before and concurrent with beginning operations. The franchisor also may periodically make available to the franchisee or employees, additional training programs that Cinnabon, in its discretion, chooses to conduct. The franchisor may also periodically conduct a conference, convention, program, or training session. Territory Granted: The Franchise Agreement does not give franchisees 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 the franchisor accepts. Obligations and Restrictions: Franchisees are required to devote their best efforts to the proper and effective operation of the Bakery. If franchisees are an individual, they must either serve as a Manager or designate a Manager. If franchisees are an Entity, they must designate a Manager, who may also be the Primary Contact. Franchisees may offer in the Bakery to customers only the Approved Products that the franchisor has approved in writing. Franchisees must produce and sell all Approved Products it specifies, including all menu items and other products and services that the franchisor requires franchisees to sell, as stated in the Manuals or otherwise, which are all part of the System. Term of Agreement and Renewal: For Full Bakeries, the length of the initial franchise term is 20 years with an option to renew for an additional 20 years, if renewal requirements are met. For Express Bakery, the length of the initial franchise term is 5 years with an option to renew for 5 years, if renewal requirements are met.Financial Assistance: The franchisor may refer franchisees to leasing or financing companies not affiliated with Cinnabon. The franchisor and its affiliates receive no fees or other financial benefits from any lender for the franchisee’s financing. Currently, the franchisor 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 may modify the Franchise Agreement, if necessary, to comply with SBA requirements for franchisees to participate in certain SBA loan programs. Investment Tables: Estimated Initial Investment Name of Fee Low High Initial Franchise Fee $7,500 $30,000 Real Estate Varies Leasehold Improvements $7,500 $150,000 Equipment, Fixtures, Furniture, Menu Boards, Graphics $13,500 $85,000 Smallwares $1,200 $4,200 Storefront Signage $2,000 $7,000 Point-of-Sale (POS) System $4,000 $8,500 Architect and Business Licenses $0 $11,000 Initial Training $0 $5,000 Opening Supplies $2,000 $11,500 Insurance $2,000 $5,000 Utility Deposits $0 $500 Additional Funds (3 months) $0 $10,000 Grand Opening Advertising $1,000 $3,000 Estimated Total (excluding Real Estate) $40,700 $330,700 *The estimated initial investment range covers from an Express Bakery up to a Full Bakery. Please see FDD for more details. Other Fees 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 1.5% of Net Sales but the franchisor may adjust this amount up to 3% of Net Sales. Advertising Cooperative Contribution An amount set by the Advertising Cooperative. Local Marketing Obligation Each calendar quarter, franchisees must spend not less than 1% of Net Sales on local market advertising. 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. The franchisor may charge franchisees its costs plus a reasonable administrative fee. EFT NSF Fee The franchisor’s out-of-pocket costs and an administrative fee. Interest 1.5% per month or maximum legal interest rate. Late Fee for reports, financial statements or tax returns $50 per week. Taxes The franchisor’s cost Subsequent Trainee Initial Training Fee Currently, up to $500 per trainee. On-Site Training and Assistance A reasonable fee, currently, $50 per hour plus travel and living expenses. Additional Support/Consulting Fee A reasonable fee, currently, $500 per day, plus travel and living expenses. Conference/Program Fee A reasonable fee, which will vary by program. Training Cancellation Fee The franchisor’s out of pocket costs. Electronic Learning Management System Amount of fees. Cinnabon estimates the cost will be $500 to $750 annually. Carvel Product Platform Training Fee $750 Rent Will vary based on location and other factors; the franchisor estimates rent will range from $4,500 to $20,000 per month. Relocation Fee 10% of the then-current Initial Franchise Fee Lease Renewal Fee The then-current fee. Currently, $2,000 Lease Documentation Fee $500 per month (or partial month) until delivered SRU Fees Monthly rental fee, which may be calculated as (i) a flat dollar amount or (ii) a percentage of Net Sales derived from the SRU (currently, 8%), up to a maximum dollar amount (currently, $1,600 to $2,500). Transfer Fee 50% of the then-current Initial Franchise Fee if it is a Control Transfer; if it is a transfer to a related party or that is a non-Control Transfer, 10% of the then-current Initial Franchise Fee. Renewal Fee 10% of the then-current initial franchise fee for the type of Bakery the franchisee will operate. Computer Systems FeeA reasonable fee, which will vary based on the services the franchisor provided. POS System Support Fee Currently, estimated to be between $25 and $250 per month depending on the level of support the franchisee selects Credit Card Fees Equipment costs and set up fees estimated to be up to $1,000 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. PCI Compliance Service Fee Equipment cost and setup fees are estimated to be up to $90 per month. Professional installation fees are estimated to be up to $500 depending on the vendor and plan the franchisee selects. Gift Card and Loyalty Program Fees Amount of fees. Purchasing Program Fee Reasonable membership fees assessed by the Purchasing Program. Supply Chain Fee Currently $0.17 to $0.27 per case purchased through certain Appointed Distributors Development Deadline Extension Fee $2,500 per missed deadline. Non-Compliance Fee Currently, $25 to $500 for a single violation, but may vary based on the severity of defaults, number of defaults, and repetition of defaults. Failure to Comply with Standards or Law Fee Up to a $5,000 fee plus the franchisor’s reasonable expenses connected with any inspection, examination, or analysis of products. Audit Cost of audit. Repeated Inspection Fee Cost of inspection. 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. Liquidated Damages (Express bakery) The average amount the franchisee paid per month to purchase Proprietary Goods 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 Goods 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. Indemnification of Cinnabon The Franchisor’s cost. Attorneys’ Fees The Franchisor’s cost.. Reinstatement Fee 10% of the amount of the then-current Initial Franchise Fee, plus Royalty Fees that would have been payable in period between termination and reinstatement. De-identification Fee Cinnabon’s actual costs, plus interest and an administrative fee equal to 15% of Cinnabon’s actual costs. The above information has been compiled from the FDD of Cinnabon. Year of FDD: 2018Franchise Direct’s Disclaimer

Other Fees
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 1.5% of Net Sales but the franchisor may adjust this amount up to 3% of Net Sales.
Advertising Cooperative Contribution An amount set by the Advertising Cooperative.
Local Marketing Obligation Each calendar quarter, franchisees must spend not less than 1% of Net Sales on local market advertising.
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. The franchisor may charge franchisees its costs plus a reasonable administrative fee.
EFT NSF Fee The franchisor’s out-of-pocket costs and an administrative fee.
Interest 1.5% per month or maximum legal interest rate.
Late Fee for reports, financial statements or tax returns $50 per week.
Taxes The franchisor’s cost
Subsequent Trainee Initial Training Fee Currently, up to $500 per trainee.
On-Site Training and Assistance A reasonable fee, currently, $50 per hour plus travel and living expenses.
Additional Support/Consulting Fee A reasonable fee, currently, $500 per day, plus travel and living expenses.
Conference/Program Fee A reasonable fee, which will vary by program.
Training Cancellation Fee The franchisor’s out of pocket costs.
Electronic Learning Management System Amount of fees. Cinnabon estimates the cost will be $500 to $750 annually.
Carvel Product Platform Training Fee $750
Rent Will vary based on location and other factors; the franchisor estimates rent will range from $4,500 to $20,000 per month.
Relocation Fee 10% of the then-current Initial Franchise Fee
Lease Renewal Fee The then-current fee. Currently, $2,000
Lease Documentation Fee $500 per month (or partial month) until delivered
SRU Fees Monthly rental fee, which may be calculated as (i) a flat dollar amount or (ii) a percentage of Net Sales derived from the SRU (currently, 8%), up to a maximum dollar amount (currently, $1,600 to $2,500).
Transfer Fee 50% of the then-current Initial Franchise Fee if it is a Control Transfer; if it is a transfer to a related party or that is a non-
Control Transfer, 10% of the then-current Initial Franchise Fee.
Renewal Fee 10% of the then-current initial franchise fee for the type of Bakery the franchisee will operate.
Computer Systems Fee A reasonable fee, which will vary based on the services the franchisor provided.
POS System Support Fee Currently, estimated to be between $25 and $250 per month depending on the level of support the franchisee selects
Credit Card Fees Equipment costs and set up fees estimated to be up to $1,000 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.
PCI Compliance Service Fee Equipment cost and setup fees are estimated to be up to $90 per month. Professional installation fees are estimated to be up to $500 depending on the vendor and plan the franchisee selects.
Gift Card and Loyalty Program Fees Amount of fees.
Purchasing Program Fee Reasonable membership fees assessed by the Purchasing Program.
Supply Chain Fee Currently $0.17 to $0.27 per case purchased through certain Appointed Distributors
Development Deadline Extension Fee $2,500 per missed deadline.
Non-Compliance Fee Currently, $25 to $500 for a single violation, but may vary based on the severity of defaults, number of defaults, and repetition of defaults.
Failure to Comply with Standards or Law Fee Up to a $5,000 fee plus the franchisor’s reasonable expenses connected with any inspection, examination, or analysis of products.
Audit Cost of audit.
Repeated Inspection Fee Cost of inspection.
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.
Liquidated Damages (Express bakery) The average amount the franchisee paid per month to purchase Proprietary Goods 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 Goods 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.
Indemnification of Cinnabon The Franchisor’s cost.
Attorneys’ Fees The Franchisor’s cost..
Reinstatement Fee 10% of the amount of the then-current Initial Franchise Fee, plus Royalty Fees that would have been payable in period between termination and reinstatement.
De-identification Fee Cinnabon’s actual costs, plus interest and an administrative fee equal to 15% of Cinnabon’s actual costs.