Is Cinnabon required to maintain the Ad Fund in a separate account from its other funds?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree that: (i) we need not maintain the Ad Fund, your Advertising Contributions, or income earned from contributions to the Ad Fund in a separate account from our other funds; (ii) we are not a fiduciary with respect to your Advertising Contributions or the Ad Fund; and (iii) the Ad Fund is not a "trust." We are not required to have an independent audit of the Ad Fund completed.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, Cinnabon is not required to maintain the Ad Fund in a separate account from its other funds. Cinnabon franchisees contribute to the Ad Fund, which is used for advertising and promoting the Cinnabon brand.
Specifically, the FDD states that Cinnabon need not keep the Ad Fund, franchisee contributions, or any income earned from those contributions in a separate account. Additionally, Cinnabon does not act as a fiduciary regarding these advertising contributions, and the Ad Fund is not considered a trust. Furthermore, Cinnabon is not required to have an independent audit of the Ad Fund completed.
This arrangement gives Cinnabon significant flexibility in managing the Ad Fund. However, it also means that franchisees do not have the assurance of segregated funds or independent oversight, which are sometimes seen in other franchise systems. Prospective franchisees should consider this when evaluating the level of control and transparency they desire regarding advertising funds.