Does the definition of 'Net Sales' for Cinnabon include online sales?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
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- "Net Sales" means all revenues generated by your Bakery or conducted from or with respect to the Bakery, whether the sales are evidenced by cash, check, credit, charge, account, barter or exchange.
Net Sales includes monies, gift card redemptions, or credit generated by or received from (i) the sale of Approved Products or tangible property of every kind and nature, promotional or otherwise, anywhere and (ii) services performed from, at, or in connection with the Bakery, including (x) off-premises services (such as catering and delivery), (y) on-premises services (such as games, gambling machines, or third-party advertising within the Bakery), or (z) any other services or activities that use either the System, the Marks, or products that are the same as or similar to the Approved Products.
The foregoing list is not intended to provide approval for such activities, which may be conducted only if approved.
Unless we specify otherwise in writing, Net Sales shall include all ancillary charges or fees, including delivery fees and other service charges, that are paid to you by a customer or by a third-party delivery or catering service (e.g., Uber Eats, Postmates, Grubhub, ezCater, or DoorDash) (a "TPS") in connection with delivery or catering services related to your Bakery (recognizing that though the TPS may pay you an amount equal to the purchase price charged to the customer less a commission, other fees, and any discounts, credits, or coupons applied to that order, such commission, fees, discounts, credits, and coupons will not be deducted from your Net Sales).
Source: Item 6 — OTHER FEES (FDD pages 31–45)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, Net Sales include revenues generated by the bakery, encompassing all sales whether evidenced by cash, check, credit, or other forms of exchange. Specifically, Net Sales include monies or credit received from the sale of approved products or tangible property and services performed in connection with the bakery. This includes off-premises services like catering and delivery.
Furthermore, the definition of Net Sales explicitly addresses third-party delivery services. Unless otherwise specified in writing by Cinnabon, Net Sales include all ancillary charges or fees, including delivery fees and other service charges, that are paid to the franchisee by a customer or by a third-party delivery or catering service such as Uber Eats, Postmates, Grubhub, ezCater, or DoorDash. The commission, fees, discounts, credits, and coupons applied to the order by the third-party service will not be deducted from the franchisee's Net Sales.
In practical terms, this means that Cinnabon franchisees must include all revenue from online orders, whether placed directly through the bakery or through third-party delivery services, when calculating their Net Sales for the purpose of royalty and advertising fee payments. This comprehensive definition ensures that all sources of revenue generated by the Cinnabon bakery are subject to the applicable fees, regardless of how the sales are transacted or fulfilled. Franchisees should be aware of this broad definition and maintain accurate records of all sales, including those from online platforms, to ensure compliance with the franchise agreement.