Is a Cinnabon franchisee required to make an advertising contribution?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
creased by the Co-Branded Franchisor, in its
- Section 3.2.A. (Royalty Fee):
sole discretion, at any time during the Term up to a maximum of 8% of the Net Sales that are attributable to AA Products (which will be collected by the Co-Branded Franchisor). The Royalty Fee will be payable each week on the Net Sales of the Franchised Business for the preceding week (or on any other basis stated in the Manuals or in our written notice to you).
[For Auntie Anne's Co-Branded Bakeries in Streetside Locations:] The Royalty Fee shall be 6% of the Net Sales of the Franchised Business, payable each week on the Net Sales of the Franchised Business for the preceding week (or on any other basis stated in the Manuals or in our written notice to you). We and the Co-Branded Franchisor will jointly collect the Royalty Fee from you based on the Net Sales of the entire Co-Branded Franchise.
[For Carvel Co-Branded Bakeries:] The Royalty Fee shall be 6% of the Net Sales of the Franchised Business, payable each week on the Net Sales of the Franchised Business for the preceding week (or on any other basis stated in the Manuals or in our written notice to you). We and the Co-Branded Franchisor will jointly collect the Royalty Fee from you based on the Net Sales of the entire Co-Branded Franchise.
10. Section 3.2.B. (Advertising Contribution):
The Advertising Contribution shall be in an amount we determine, in our sole discretion, which when combined with the Local Marketing Obligation (as specified in Section 10.1.E. (Local Marketing Obligation)) shall not exceed 5% of the Net Sales of the Franchised Business, payable each week on the Net Sales of the Franchised Business for the preceding week (or on any other basis stated in the Manuals or in our written notice to you). We will collect the Advertising Contribution from you based on the portion of the Net Sales of the Franchised Business that are attributable to products that we and the Co-Branded Franchisor mutually agree, in our and its sole discretion, to credit towards the Cinnabon® side of the Franchised Business.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, franchisees are required to make an advertising contribution. The amount of the Advertising Contribution is determined by Cinnabon, but when combined with the Local Marketing Obligation, it cannot exceed 5% of the Net Sales of the Franchised Business. This contribution is payable each week based on the Net Sales of the Franchised Business for the preceding week, or on any other basis stated in the Manuals or in Cinnabon's written notice. For Co-Branded franchises, the advertising contribution is split between Cinnabon and the Co-Branded Franchisor, based on the portion of Net Sales attributable to each brand.
Cinnabon uses these advertising contributions for various marketing and promotional activities. These activities include national, regional, and local advertising campaigns, digital marketing, market research, and the development of advertising materials. The funds may also cover administrative costs and overhead related to these activities, such as working with advertising agencies, maintaining websites, and developing new products.
Cinnabon is not obligated to ensure that the advertising expenditures are proportionate to the franchisee's contributions or that the Franchised Business directly benefits from the advertising. Franchisees are required to make all advertising contributions without reduction, regardless of their perceived benefit or the contributions of other franchisees. This means that even if a franchisee believes the advertising is not benefiting their specific location, they are still obligated to pay the Advertising Contribution. Additionally, franchisees must still pay the advertising contribution, even if other franchisees default on their advertising obligations.