What was the effective tax rate for Cinnabon for the fiscal year ended December 29, 2024?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
| December 29, | December 31, | |
|---|---|---|
| For the fiscal years ended: | 2024 | 2023 |
| Statutory rate | 21.0 | 21.0 |
| % | % | |
| State income tax, net of federal tax effect | 3.8 | 3.3 |
| Foreign income tax, net of federal tax effect | 4.3 | 3.2 |
| Foreign tax credits | (3.7) | (3.1) |
| Renewable energy and other tax credits | (3.2) | - |
| Permanent differences | (1.4) | (1.6) |
| Other differences, net | (1.4) | (1.4) |
| Effective tax rate | 19.4 | 21.4 |
| % | % |
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, the effective tax rate for the fiscal year ended December 29, 2024, was 19.4%. This is a decrease compared to the previous fiscal year ended December 31, 2023, when the effective tax rate was 21.4%.
The effective tax rate is influenced by several factors beyond the statutory rate of 21.0%. These include state income taxes (net of federal tax effect) which added 3.8% in 2024, foreign income taxes (net of federal tax effect) which added 4.3%, and foreign tax credits which reduced the rate by 3.7%. Renewable energy and other tax credits further reduced the rate by 3.2%, while permanent differences and other net differences each reduced the rate by 1.4%.
For a prospective Cinnabon franchisee, understanding the effective tax rate provides insight into the company's profitability and how various tax incentives and obligations impact its overall financial performance. While the franchisee's tax situation will differ, this information can be useful for benchmarking and understanding the broader economic environment in which Cinnabon operates.