What is the maximum 'Allowed Adjustment' that Cinnabon can apply to a fee in a calendar year?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
For any fee that may be increased by no more than the Allowed Adjustment, the "Allowed Adjustment" in any calendar year will not exceed, at our option, (a) 50% of the fee that is in effect at the start of the calendar year or (b) the increase in the actual costs and expenses that we or our affiliates incur to provide such goods or services to you.
Source: Item 6 — OTHER FEES (FDD pages 31–45)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, the maximum 'Allowed Adjustment' that Cinnabon can apply to certain fees in a calendar year is determined at their option. This adjustment will not exceed either 50% of the fee in effect at the start of the calendar year or the increase in Cinnabon's or its affiliates' actual costs and expenses to provide the related goods or services.
This means that Cinnabon has the flexibility to choose the higher of these two options when adjusting fees. For a prospective franchisee, this indicates that certain fees could potentially increase significantly from year to year, depending on Cinnabon's costs or the initial fee amount. It is important to note that this 'Allowed Adjustment' applies only to fees that Cinnabon has the right to increase.
Several fees outlined in Item 6 of the FDD, such as the Supply Chain Fee, Guest Relations Fee, Non-compliance Fee, and Late Reporting Fee, are subject to this 'Allowed Adjustment.' Franchisees should be aware of these potential increases when budgeting and forecasting their expenses. Understanding how these adjustments are calculated and which fees are subject to them is crucial for managing the financial aspects of a Cinnabon franchise.