What was the amount of revenue recognized by Cinnabon during the fiscal year ended December 31, 2023?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
tements from being misleading. Management evaluated events occurring subsequent to December 29, 2024 through March 7, 2025, the date these consolidated financial statements were available for issuance, and determined that no subsequent event required recognition or disclosure.
2 Revenue
The Company recognizes franchise revenues, Company SBR revenues, franchise and other rental revenues, and advertising funds revenues as the related performance obligations are satisfied.
The Company generally recognizes revenue associated with franchise and development fees of open SBRs over time. The Company's other revenue streams are generally recognized at a point in time.
Franchise revenues are disaggregated by the timing of recognition as follows:
| December 29, | December 31, | |
|---|---|---|
| For the fiscal years ended: | 2024 | 2023 |
| Franchise revenues satisfied over time | $ 4,398 | $ 5,600 |
| Franchise revenues satisfied at a point in time | 344,654 | 331,846 |
| Franchise revenues | $ 349,052 | $ 337,446 |
Changes in deferred franchise and development fees are as follows:
| | December 29, | December 31, | |--------------------------------------------
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, several categories of revenue were recognized during the fiscal year ended December 31, 2023. Franchise revenues satisfied over time amounted to $5,600, while franchise revenues satisfied at a point in time totaled $331,846. This resulted in total franchise revenues of $337,446 for that year. Additionally, operating lease income was $9,240, and variable lease income was $112, leading to franchise and other rental revenues of $9,352. Revenue recognized during the year from changes in deferred franchise and development fees was reported as ($10,569).
These figures provide a detailed breakdown of how Cinnabon generates revenue through its franchise operations. The majority of revenue comes from franchise fees recognized at a point in time, which likely includes initial franchise fees and other upfront payments. A smaller portion is recognized over time, possibly representing ongoing royalties or service fees. The additional income from operating and variable leases, as well as franchise and other rental revenues, indicates Cinnabon's involvement in leasing or subleasing properties to franchisees.
The deferred revenue figures show how Cinnabon accounts for revenue received but not yet earned. The negative value for revenue recognized during the year from changes in deferred franchise and development fees suggests that Cinnabon recognized less revenue from these sources than it had deferred in previous periods. This could be due to various factors, such as changes in the timing of franchise openings or adjustments to development agreements. A prospective franchisee should consider these different revenue streams and how they might impact the overall financial health and stability of the Cinnabon franchise system.
Understanding these revenue components is crucial for potential franchisees as it offers insights into the financial performance and revenue-generating activities of Cinnabon. Reviewing these figures in conjunction with other financial data in the FDD can help franchisees assess the overall financial viability and potential return on investment of a Cinnabon franchise.