How is the Royalty Fee calculated for a Cinnabon Express Bakery in a Schlotzsky's?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
ument. We and the Co-Branded Franchisor will jointly collect and split the other initial fees described in this Item 5.
All Initial Fees. Except as noted above, you do not pay us or our affiliates any other fees or payments for services or goods before your Bakery opens. The initial fees are not refundable.
ITEM 6 OTHER FEES
| Type of Fee1, 5 | Amount | Date Due | Remarks |
|---|---|---|---|
| Royalty Fee | 6% of Net Sales, except: Auntie Anne's Co Branded Bakeries in Other Locations: 6% of Net Sales attributed to Cinnabon; 7% of Net Sales attributed to Auntie Anne's, which Auntie Anne's may increase in its sole discretion to 8% of Net Sales Express Bakeries in a Schlotzsky's: then-current product price per case | For Full Bakeries, payable weekly on the date specified in the Manuals (the "Payment Due Date"); For Express Bakeries, due on receipt of our or the Supplier's invoice for the products | See Note 2 for the definition of "Net Sales." See Note 3 for the definition of "Other Locations" For Auntie Anne's Co-Branded Bakeries in Other Locations, we will collect our Royalty Fee (which is 6% of Net Sales) based on the portion of Net Sales attributable to products that we and Auntie Anne's have agreed to credit to the Cinnabon side of the Co-Branded Bakery, and Auntie Anne's will collect a separate Royalty Fee (which is 7% to 8% of Net Sales) based on the portion of Net Sales attributable to products that we and Auntie Anne's have agreed to credit to the Auntie Anne's side of the Co-Branded Bakery. For Express Bakeries that are in a Schlotzsky's, the Royalty Fee shall be the then-current price per case of freezer-proofer-oven rolls or other approved proprietary Cinnabon products you purchase from us or our designated Supplier. |
Source: Item 6 — OTHER FEES (FDD pages 31–45)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, the Royalty Fee for an Express Bakery located within a Schlotzsky's is determined by the then-current product price per case of freezer-proofer-oven rolls or other approved proprietary Cinnabon products. These products must be purchased from Cinnabon or its designated supplier. This differs from the standard royalty fee of 6% of Net Sales for full bakeries.
This means that instead of paying a percentage of your total sales, franchisees operating an Express Bakery in a Schlotzsky's location pay a royalty based on the volume of Cinnabon products they purchase. This could be beneficial for franchisees with lower sales volumes, as the royalty fee is directly tied to product usage rather than overall revenue. However, it also means that the royalty expense will fluctuate based on product costs and the amount of product needed to meet customer demand.
It's important for prospective franchisees to understand the pricing structure of these proprietary products and estimate their potential sales volume to accurately project royalty expenses. The FDD specifies that the royalty fee is due upon receipt of the invoice from Cinnabon or its supplier, so franchisees need to factor this into their cash flow management. This structure is unique compared to other Cinnabon franchise models, such as Auntie Anne's co-branded bakeries, where royalties are a percentage of net sales attributed to each brand.