What are the reporting requirements for Net Sales for a Cinnabon franchise?
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. |
| 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). |
| Taxes and Other Payments | Our costs and expenses | Within 10 days after demand | You must pay us or our affiliates (i) all sales taxes, corporate taxes, and any similar taxes paid by us on your behalf, imposed on us, or required to be collected by us on account of products or services we furnish to you (through sale, lease, or otherwise) or on account of our collection of any fee related to the Franchise Agreement; |
Source: Item 6 — OTHER FEES (FDD pages 31–45)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, franchisees must submit timely, complete, and accurate reports, financial statements, and tax returns when due. Failure to do so can result in a Late Reporting Fee. The current fee is $50 per week. Cinnabon may adjust this fee each year, but the adjustment cannot exceed the Allowed Adjustment as defined in Note 4 of Item 6.
In addition to the general reporting requirement, if a Cinnabon franchisee participates in the SRU (Small Retail Unit) Program and leases the SRU from Cinnabon or its affiliate, they will pay an ongoing monthly rental fee. This fee is either a flat dollar amount or a percentage of Net Sales, currently at 8%, up to a maximum dollar amount ranging from $1,600 to $2,750. The maximum SRU monthly rental fee varies based on the type of SRU.
It's important to note that Cinnabon can increase the SRU rental fee and maximum rental fee with 30 days' written notice. However, these fees cannot be increased by more than the Allowed Adjustment in any calendar year. Franchisees should be aware of these reporting requirements and potential fees to ensure compliance and avoid penalties.