What is the maximum 'Allowed Adjustment' that Cinnabon can make to any fee in a calendar year?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
For any fee specified in this Agreement 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 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, the maximum 'Allowed Adjustment' that Cinnabon can make to certain fees in a calendar year is determined at their option. Cinnabon can choose between two options: a 50% increase of the fee in effect at the start of the calendar year, or an increase that reflects the actual increase in costs and expenses incurred by Cinnabon or its affiliates to provide the related goods or services.
This means that a prospective Cinnabon franchisee could see significant increases in certain fees from year to year, up to 50% of the starting fee amount, depending on which option Cinnabon chooses. The franchisee should be aware that Cinnabon has the discretion to select the higher of these two adjustment methods, which could lead to unpredictable cost increases.
It is important to note that this 'Allowed Adjustment' applies to specific fees outlined in the Franchise Agreement. Franchisees should carefully review the agreement to identify which fees are subject to this adjustment clause and understand the potential financial impact of these increases over the term of the franchise agreement. This level of potential fee adjustment is relatively high compared to some other franchises, so prospective franchisees should factor this into their financial planning.