Can a buying cooperative organized by Cinnabon or its affiliates be the designated single source for purchasing or leasing Goods?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
ees for any of these items. The availability and terms of financing will depend on factors like the availability of financing generally, your credit worthiness, collateral you pledge, policies of your lending institution, and economic conditions in your area.
ITEM 8
RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES
Required Purchases. We have the right to require that Approved Products, other products, Proprietary Ingredients, supplies (including chemicals), furniture, fixtures, equipment, and services (collectively, "Goods") that you purchase for resale or purchase or lease for use in your Bakery: (i) meet specifications that we establish from time to time; (ii) be a specific brand, kind, or model; (iii) be purchased or leased only from Approved Suppliers; (iv) be purchased or leased only from a single source that we designate (which may include us or our affiliates or a buying cooperative organized by us or our affiliates); and/or (v) be purchased as part of a purchasing program, arrangement, or contract that we negotiate or specify. We may add or change Approved Suppliers at any time.
You must purchase all of your requirements of Proprietary Ingredients, Proprietary Products, and proprietary uniforms, signs, menu boards, smallwares, materials, supplies, paper goods, equipment, and packaging (collectively, the "Proprietary Goods") from us, our affiliates, or our designated Approved Suppliers. The Proprietary Goods include printed paper, paper products, and plastic products bearing our Proprietary Marks (including, for example, dishes, containers,
cartons, bags, napkins, and packaging supplies). We may require you to purchase certain trademarked product lines consisting of t-shirts, apparel, mugs, and other merchandise and products bearing the Proprietary Marks ("Trademarked Product Lines") from us, our affiliates, or our designated Approved Suppliers.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 59–63)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, Cinnabon has the right to mandate that franchisees purchase or lease goods from a single designated source. This source may include Cinnabon itself, its affiliates, or a buying cooperative organized by Cinnabon or its affiliates. These "Goods" include approved products, other products, proprietary ingredients, supplies (including chemicals), furniture, fixtures, equipment, and services that franchisees purchase for resale or for use in their bakeries.
This means that Cinnabon franchisees may be required to source certain items exclusively through a Cinnabon-affiliated buying cooperative if one is established. This allows Cinnabon to control the quality and consistency of products used across all franchise locations. It also potentially gives Cinnabon and its affiliates more leverage in negotiating prices with suppliers, which could benefit franchisees through lower costs, or benefit Cinnabon through rebates and other payments from suppliers.
While Cinnabon has the right to form purchasing programs, it is not currently doing so. The FDD states that neither Cinnabon nor CLLC have arranged any purchasing and/or distribution cooperatives, associations, or programs among their franchisees. However, Cinnabon retains the right to form these purchasing programs at any time, and if they do, franchisees must become members, remain in good standing, and pay all reasonable membership fees. Currently, Cinnabon estimates that purchases from Approved Suppliers and under their Standards will be about 85% of the total purchases and lease of products and services needed to establish the Bakery and about 90% of the total purchases and leases of products and services needed to operate a Bakery.
Prospective franchisees should be aware that Cinnabon and its affiliates may receive payments based on franchisee purchases and leases, including from promotional allowances, volume discounts, and other payments made by suppliers. During the fiscal year ended December 29, 2024, Cinnabon received payments totaling $1,857,117 from Approved Suppliers. CLLC also received $1,996,454 in payments from Approved Suppliers, which were deposited into the Ad Fund for the entire brand's benefit. This revenue structure incentivizes Cinnabon to negotiate favorable terms with suppliers, but it also means franchisees may not always have the option to seek out the lowest possible prices on their own.