Is the Royalty Fee for Cinnabon negotiable?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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 standard royalty fee is 6% of Net Sales for most Cinnabon bakeries. However, the royalty structure varies for Auntie Anne's co-branded bakeries in Other Locations. For these co-branded locations, Cinnabon collects 6% of Net Sales attributed to Cinnabon products, while Auntie Anne's collects a separate royalty fee of 7% to 8% of Net Sales attributed to Auntie Anne's products. For Express Bakeries located within a Schlotzsky's, the royalty fee is based on the then-current product price per case of freezer-proofer-oven rolls or other approved proprietary Cinnabon products purchased from Cinnabon or its designated supplier.
Net Sales, as defined in the FDD, excludes certain items such as initial sales or reloading of gift cards, discounts, refunds made in good faith, discounted employee meals, sales taxes collected from customers, the sale of equipment, and tips. Net Sales does include sales made from an SRU (presumably a smaller retail unit). The FDD specifies that 'Streetside Locations' include freestanding, inline, and endcap locations on city streets or in shopping centers, excluding malls and outlet malls, while 'Other Locations' encompass all locations other than Streetside Locations, including malls, outlet malls, Non-Traditional Locations, and ghost or delivery kitchens.
The FDD does not explicitly state that the royalty fee is negotiable. The document outlines the specific royalty percentages and structures for different types of Cinnabon locations (Full Bakeries, Express Bakeries, and co-branded locations). The absence of any mention of negotiability suggests that the royalty fee is generally non-negotiable, although this is not definitively stated.
A prospective franchisee should directly inquire with Cinnabon about the possibility of negotiating the royalty fee, especially if they have unique circumstances or are considering a large-scale development agreement. Understanding the specific factors that might influence the franchisor's willingness to negotiate, if any, is crucial for making an informed investment decision.