What revenues are included in the definition of 'Net Sales' for a Cinnabon bakery?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
"Net Sales" includes all revenues generated by a Bakery or conducted from or with respect to a Bakery, whether the sales are evidenced by cash, check, credit, charge, account, barter or exchange, but does not include (a) the initial sales or reloading of gift cards, (b) discounts, (c) the sale of food or merchandise for which refunds have been made in good faith to customers, (d) the discounted portion of employee meals, (e) sales, meals, use or excise tax imposed by a governmental authority directly on sales and collected from customers, provided that the amount for the tax is added to the selling price or absorbed therein and is actually paid by you to a governmental authority, (f) the sale of equipment used in the operation of the Bakery, or (g) tips. See Note 2 of Item 6 for a complete definition of "Net Sales."
Source: Item 19 — Financial Performance Representations (FDD pages 100–104)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, 'Net Sales' encompasses all revenues generated by a Cinnabon bakery, regardless of the payment method. This includes sales made via cash, check, credit, charge, account, barter, or exchange. This broad definition ensures that all income streams directly resulting from the bakery's operations are accounted for when calculating financial performance.
However, the definition of 'Net Sales' for Cinnabon specifically excludes certain items. These exclusions include the initial sales or reloading of gift cards, any discounts offered, and the sale of food or merchandise for which refunds have been legitimately provided to customers. Additionally, the discounted portion of employee meals is not included in 'Net Sales.'
Furthermore, 'Net Sales' does not include sales, meals, use, or excise taxes imposed by a governmental authority directly on sales and collected from customers, provided that the amount for the tax is added to the selling price or absorbed therein and is actually paid to a governmental authority. The sale of equipment used in the operation of the Bakery, or tips are also excluded from the calculation of 'Net Sales.' Understanding these inclusions and exclusions is crucial for prospective franchisees to accurately assess their potential financial performance and manage their business operations effectively.