For Cinnabon, what amount of deferred revenue relates to the unsatisfied future performance obligations associated with unopened SBRs?

According to Cinnabon's 2025 Franchise Disclosure Document, deferred revenue of $24,501 relates to the unsatisfied future performance obligations associated with unopened SBRs. This amount is not included in the provided table. Cinnabon anticipates recognizing this revenue over the terms of the respective franchise agreements, which typically range from 10 to 20 years, once the related SBRs are opened.

For a prospective Cinnabon franchisee, this deferred revenue represents fees already collected by Cinnabon for stores that have not yet opened. The revenue recognition is tied to the performance obligation of opening the store and fulfilling the franchise agreement. The 10-20 year timeframe for revenue recognition highlights the long-term nature of the franchise agreements.

This accounting practice is standard in franchising, where initial franchise fees are often recognized over the life of the agreement rather than immediately upon receipt. This approach provides a more accurate reflection of the ongoing services and support Cinnabon provides to its franchisees throughout the term of the agreement. Franchisees should understand that Cinnabon's financial performance is, in part, tied to the successful opening and operation of new stores, as this triggers the recognition of deferred revenue.