Does the definition of 'Net Sales' in the Cinnabon Franchise Agreement include revenues generated from a Satellite Retail Unit (SRU)?

According to the 2025 Cinnabon Franchise Disclosure Document, the definition of "Net Sales" in the Franchise Agreement does include all revenues generated from a Satellite Retail Unit (SRU). This clarification is explicitly stated as an amendment to Section 3.2.C of the Franchise Agreement. This means that when calculating royalties, advertising fees, and other payments based on a percentage of net sales, a Cinnabon franchisee must include all revenue from any SRU they operate.

For a prospective Cinnabon franchisee, this is a crucial point to understand. If the franchisee operates both a traditional Cinnabon store and a Satellite Retail Unit, the royalties and advertising contributions will be based on the combined sales of both locations. This could impact the overall profitability of the franchise, especially if the SRU has lower margins or higher operating costs.

It is important for franchisees to factor in the SRU's revenue when projecting their overall sales and expenses. Additionally, franchisees should ensure they understand how Cinnabon defines "Net Sales" in detail, as this definition can include or exclude certain items (like discounts, taxes, etc.) that could affect the total amount subject to royalty and advertising fees. Understanding this aspect of the agreement is vital for accurate financial planning and operational management.