When is the Cinnabon insufficient funds fee due?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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. |
Source: Item 6 — OTHER FEES (FDD pages 31–45)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, the insufficient funds fee is due on invoice. This fee is charged if Cinnabon attempts to draft money from a franchisee's account via electronic funds transfer (EFT) and the account lacks sufficient funds to cover the draft.
The amount of the insufficient funds fee can be up to 110% of Cinnabon's or its affiliates' actual costs and expenses. This means the fee not only covers the bounced payment but also any related expenses incurred by Cinnabon. Additionally, the FDD specifies that this fee will include any bank return charges, so franchisees are responsible for covering those costs as well.
It's important to note that the insufficient funds fee is in addition to any interest charged on the amount that was originally due. Therefore, franchisees should ensure they have sufficient funds available when Cinnabon initiates an EFT to avoid these extra charges. This is a fairly standard practice in franchising, as franchisors need to protect themselves from the costs associated with failed payments.