Are delivery fees included in Cinnabon's definition of 'Net Sales'?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
- C. Net Sales. "Net Sales" means all revenues generated by your Franchised Business or conducted from or with respect to the Franchised Business, 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 Franchised Business, including (x) offpremises services (such as catering and delivery), (y) on-premises services (such as games, gambling machines, or third-party advertising within the Franchised Business), 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,
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, Net Sales include all revenues from the Franchised Business, covering sales made through cash, credit, or other forms of exchange. Net Sales include monies, gift card redemptions or credit received from the sale of approved products or tangible property and services performed in connection with the Franchised Business, including off-premises services like catering and delivery.
Specifically, the FDD states that unless Cinnabon specifies otherwise in writing, Net Sales will include all ancillary charges or fees, including delivery fees and other service charges. This means that franchisees must include delivery fees when calculating their Net Sales, which is important because ongoing fees like the Royalty Fee and Advertising Contribution are calculated as a percentage of Net Sales.
For a prospective Cinnabon franchisee, this definition of Net Sales is important for calculating revenue and understanding the basis for royalty and advertising fee payments. Franchisees should be aware that delivery fees are part of the revenue on which these fees are based, unless Cinnabon provides written notice to the contrary.