Is Cinnabon required to maintain the Ad Fund in a separate account?

According to Cinnabon's 2025 Franchise Disclosure Document, Cinnabon is not required to maintain the Ad Fund in a separate account. Cinnabon states that they currently do not, and are not required to, maintain the Ad Fund, advertising contributions paid, or income earned from contributions to the Ad Fund in a separate account from their other money.

Cinnabon allocates advertising contributions to a fund used for advertising and promoting the Bakeries, Marks, and the System. Franchisees are required to make Advertising Contributions to the Ad Fund. The amount varies depending on the location type: 2.5% of Net Sales for Bakeries in Other Locations, and 3% of Net Sales for Bakeries in Streetside Locations and Swirl Bakeries. No advertising contribution is collected for Express Bakeries in a Schlotzsky's. Cinnabon retains the right to increase the Advertising Contribution with notice to franchisees, but the combined Advertising Contribution and Local Marketing Obligation will not exceed 5% of Net Sales.

This policy means that Cinnabon has the ability to use advertising funds for other business purposes. While this is permitted, it is important for prospective franchisees to be aware of this arrangement. Franchisees may want to inquire about how the Ad Fund monies are tracked internally and what assurances Cinnabon can provide that the funds are used appropriately for advertising and promotion, even if not legally required to be kept separate. Cinnabon does provide an annual summary of the Ad Fund expenditures upon reasonable request, but is not required to prepare financial statements for the Ad Fund.