Does Cinnabon generate revenue from Company SBRs (store, bakery, and restaurant) and if so, how?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
The subsidiaries' business revenues are primarily generated from:
- Franchise revenue including royalty and mix fees, development and franchise fees, licensing fees, rebates from certain vendors, and digital transaction fees;
- Company store, bakery, and restaurant ("Company SBRs") revenue from the operations of SBR locations owned directly by certain of the Company's subsidiaries;
- Franchise and other rental revenues from properties leased and subleased to certain franchisees and other third parties; and
- Advertising funds revenue including contributions from franchisees and Company SBRs and rebates from certain vendors.
Company SBR revenues are recognized at the point of sale to the end customer, which is when the SBRs' performance obligation is satisfied. The Company presents revenues net of sales taxes collected from customers.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, the company does generate revenue from Company SBRs (store, bakery, and restaurant). The document specifies that GoTo Foods LLC, which includes Cinnabon, derives business revenues from several sources, including Company SBR revenue. This revenue comes directly from the operation of Cinnabon locations that are owned and operated by the company's subsidiaries.
For a prospective Cinnabon franchisee, this indicates that the parent company has a direct stake in the retail operations of Cinnabon stores. This can be beneficial as it aligns the franchisor's interests with those of the franchisees, as the franchisor also experiences the challenges and rewards of operating Cinnabon locations. It also means Cinnabon has first-hand experience in running the business, which can inform their support and training programs for franchisees.
The revenue from Company SBRs is recognized at the point of sale to the end customer. This means that when a customer purchases a product at a company-owned Cinnabon store, the revenue is immediately recorded. The company reports these revenues net of sales taxes collected from customers. This is a standard accounting practice, ensuring that sales taxes are not included in the reported revenue figures.
In addition to Company SBR revenue, Cinnabon's parent company also generates revenue from franchise royalties and fees, rental revenues from properties leased to franchisees, and advertising fund contributions. Understanding these different revenue streams provides a comprehensive view of how the Cinnabon franchise system operates financially.