What methods of payment are Cinnabon franchisees required to use for all amounts owed to the franchisor?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
Electronic Funds Transfer; Payment Date.
Payments of Comprehensive Support Fees will be drafted by Franchisor on behalf of Company from Franchisee's Designated Bank Account under Franchisor's electronic funds transfer or draft system ("EFT") one time per month on the same day that royalties and other fees due under the Franchise Agreement are first drafted for each month (the "Payment Date").
Payments shall commence on the Payment Date of the first (1st) full month following the Opening Date.
Time is of the essence in the performance of all payment obligations by Franchisee.
Company may change credit or payment terms at any time when, in Company's opinion, Franchisee's financial condition, previous payment record, or the nature of Franchisee's relationship with Company so warrants.
Designated Bank Account.
As used herein, the term "Designated Bank Account" means the bank account on file with Franchisor for EFT payments required under the Franchise Agreement or Manuals.
Franchisee is responsible for maintaining sufficient funds in the Designated Bank Account for all Comprehensive Support Fees due under this Agreement, in addition to any amounts drafted by EFT under the Franchise Agreement and the Manuals.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to the 2025 Cinnabon Franchise Disclosure Document, Comprehensive Support Fees are paid via Electronic Funds Transfer (EFT). These payments will be drafted by Cinnabon on behalf of the Company from the franchisee's Designated Bank Account. This occurs one time per month on the same day that royalties and other fees due under the Franchise Agreement are first drafted for each month, referred to as the Payment Date. Payments commence on the Payment Date of the first full month following the Opening Date.
Cinnabon emphasizes that timely payments from franchisees are essential. The company retains the right to modify credit or payment terms if it deems necessary based on the franchisee's financial condition, payment history, or relationship with the company. The Designated Bank Account is defined as the account on file with Cinnabon for EFT payments required under the Franchise Agreement or Manuals.
Franchisees are responsible for ensuring sufficient funds are available in the Designated Bank Account to cover all Comprehensive Support Fees, as well as any other amounts drafted via EFT as per the Franchise Agreement and Manuals. In the event of a temporary closure of the Franchised Business, payments of Comprehensive Support Fees may be suspended, provided that Cinnabon approves the closure. Franchisees must notify and obtain approval from Cinnabon for any temporary closures to be eligible for payment suspension.
This reliance on EFT for Comprehensive Support Fees ensures a consistent and reliable payment method for Cinnabon, while placing the onus on the franchisee to maintain adequate funds and manage their account responsibly. Franchisees should be aware of these requirements and plan accordingly to avoid any disruptions or penalties related to payment processing.