What happens if the Cinnabon franchisee does not pay the Royalty Fee on time?

Question

Accepted Answer

| Type of Fee1, 5                            | Amount                                                                                                                              | Date Due                          | Remarks                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  |  |  | Obligation from you and (i) contribute it to the Ad Fund, (ii) conduct national, regional, or local advertising, (iii) spend it on local advertising, or (iv) contribute it to your Advertising Cooperative. |
| Promotions and Advertising Materials | Up to 110% of our or our affiliates' actual costs and expenses related to the goods you purchase from us or them. | As incurred | You will participate at your own cost in temporary or permanent promotional campaigns that we establish (e.g., limited time offers, gift cards, coupons, loyalty programs, customer relationship management, and other supplemental marketing programs), which may be applicable to the System as a whole or to specific advertising market areas, and promotional programs your Advertising Cooperative establishes. We may require or permit you to purchase items from us or our affiliates necessary to participate in such campaigns, such as counter cards posters, banners, signs, photographs, loyalty program rewards, give-away items, and gift cards. |
| Insufficient Funds Fee | Up to 110% of our or our affiliates' actual costs and expenses | On invoice | If we draft money from your account under our electronic funds transfer ("EFT") or draft system, and there are insufficient funds to cover the draft, we may charge this fee, which will include any bank return charges. This fee is in addition to interest on the amount due. |
| Interest | The lesser of 1.5% per month or the maximum legal interest rate | On invoice | You must pay us or our affiliates interest on any amounts past due to us or our affiliates. |
| Late Reporting Fee | Our then-current fee. Currently, \$50 per week. | On invoice | You must pay this late fee if you fail to submit timely, complete and accurate reports, financial statements, tax returns, and statements of initial investment costs when due. We may change this fee in any year by no more than the Allowed Adjustment (as defined in Note 4).

Source: Item 6 — OTHER FEES (FDD pages 31–45)

What happens if the Cinnabon franchisee does not pay the Royalty Fee on time?

Answer from 2025 FDD Document

What This Means (2025 FDD)

Type of Fee1, 5	Amount	Date Due	Remarks
			Obligation from you and (i) contribute it to the Ad Fund, (ii) conduct national, regional, or local advertising, (iii) spend it on local advertising, or (iv) contribute it to your Advertising Cooperative.
Promotions and Advertising Materials	Up to 110% of our or our affiliates' actual costs and expenses related to the goods you purchase from us or them.	As incurred	You will participate at your own cost in temporary or permanent promotional campaigns that we establish (e.g., limited time offers, gift cards, coupons, loyalty programs, customer relationship management, and other supplemental marketing programs), which may be applicable to the System as a whole or to specific advertising market areas, and promotional programs your Advertising Cooperative establishes. We may require or permit you to purchase items from us or our affiliates necessary to participate in such campaigns, such as counter cards posters, banners, signs, photographs, loyalty program rewards, give-away items, and gift cards.
Insufficient Funds Fee	Up to 110% of our or our affiliates' actual costs and expenses	On invoice	If we draft money from your account under our electronic funds transfer ("EFT") or draft system, and there are insufficient funds to cover the draft, we may charge this fee, which will include any bank return charges. This fee is in addition to interest on the amount due.
Interest	The lesser of 1.5% per month or the maximum legal interest rate	On invoice	You must pay us or our affiliates interest on any amounts past due to us or our affiliates.
Late Reporting Fee	Our then-current fee. Currently, $50 per week.	On invoice	You must pay this late fee if you fail to submit timely, complete and accurate reports, financial statements, tax returns, and statements of initial investment costs when due. We may change this fee in any year by no more than the Allowed Adjustment (as defined in Note 4).