What are the Cinnabon franchisee's obligations regarding the payment of franchise fees (Item 6) and how does this relate to the franchisor's right to receive franchise fees (Item 1)?

According to the 2025 Cinnabon Franchise Disclosure Document, Item 6 outlines the various fees a franchisee must pay to the franchisor. Note 1 of Item 6 states that unless mentioned otherwise, Cinnabon directly imposes all the fees listed, franchisees pay them directly to Cinnabon, and these fees are generally non-refundable. Item 1 describes Cinnabon's rights regarding the sale of Cinnabon branded products through various channels, including wholesale, non-traditional outlets, mail order, internet sales, ghost kitchens, and other company-owned or franchised bakeries. Franchisees are not entitled to additional compensation or rights in these scenarios.

In Maryland, the payment of initial fees may be deferred until Cinnabon completes its pre-opening obligations under the Franchise Agreement. This deferral also applies to franchisees who sign a Multi-Unit Addendum, where initial fees for each franchise agreement under the addendum are deferred until Cinnabon fulfills its pre-opening duties for each respective agreement. This amendment is based on Cinnabon's financial condition and is required by the Maryland Securities Commissioner.

These stipulations mean that prospective Cinnabon franchisees need to be aware of all potential fees and payment schedules, as well as the conditions under which these fees are imposed and collected. Franchisees should carefully review Item 6 and related sections of the FDD to fully understand their financial obligations. Additionally, franchisees should understand Cinnabon's rights to sell products through other channels and the implications for their own sales and revenue. Franchisees in Maryland should also take note of the specific conditions regarding the deferral of initial fees and ensure they understand the pre-opening obligations that must be met before these fees become due.