Is there a late payment fee associated with overdue Cinnabon Royalty Fee payments?
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. |
| Type of Fee1, 5 | Amount | Date Due | Remarks |
| ------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| Guest Relations Fee | The then-current fee. Currently, $30 for each guest complaint or other contact request that you do not timely respond to or for each excessive guest complaint. | As incurred, due on the Payment Due Date | Payable, in addition to any other remedies that we are entitled to pursue (including reimbursement of any costs or expenses we may incur related to responding to or resolving such complaint on your behalf), if you fail to respond in accordance with our Standards within 72 hours to a guest contact request that we send to you or a guest complaint. We may also impose this fee for the fourth and each subsequent guest complaint received in a given month related to your Bakery. We may change the fee, time period for responding to complaints, and number of complaints deemed to be excessive from time to time, provided that the fee may not change in any year by more than the Allowed Adjustment. |
| Non compliance Fee | The then-current fee. Currently, $25 to $500 for a single violation, but may vary based on the severity of violations, number of violations, and repetition of violations. | On invoice | Payable if you fail to comply with any of the Standards, in addition to any other remedies that we are entitled to pursue. The fee may be charged repeatedly (as frequently as daily) if the non-compliance is ongoing. The fees may be increased in any calendar year by no more than the Allowed Adjustment. |
| Failure to Comply with Standards or Law Fee | Currently, up to a $5,000 fee plus our reasonable expenses connected with any inspection, examination, or analysis of products or your Bakery | On invoice | Payable if our inspection shows the products have been adulterated in any way or that your Bakery does not comply with applicable laws. If (i) we inspect your Bakery and find a violation and we find the same violation at another inspection within one year, (ii) you fail to comply with any remedial measures we require, (iii) you fail to cooperate in any inspection, or (iv) there have been repeated violations, then you must pay up to a $5,000 fee for the inspection, in addition to the travel expenses of our inspectors or representatives and any other expenses we incur, including attorneys' fees. These remedies are not exclusive. The fees may be increased in any calendar year by no more than the Allowed Adjustment. |
Source: Item 6 — OTHER FEES (FDD pages 31–45)
What This Means (2025 FDD)
According to the 2025 Cinnabon FDD, while the document outlines various fees, it does not explicitly state a late payment fee specifically for overdue Royalty Fees. The Royalty Fee is 6% of Net Sales for full bakeries, payable weekly on the date specified in the manuals, and varies for Auntie Anne's co-branded bakeries and express bakeries.
However, the FDD does list other fees that could be applicable if payments are not made on time or if the franchisee is non-compliant with Cinnabon's standards. For instance, a "Non compliance Fee" ranging from $25 to $500 may be imposed for failing to comply with any of Cinnabon's standards, in addition to other remedies. This fee can be charged repeatedly if the non-compliance is ongoing. Additionally, a "Failure to Comply with Standards or Law Fee" of up to $5,000 plus expenses may be charged if an inspection reveals violations or non-compliance with applicable laws.
Although a specific late fee for Royalty payments isn't mentioned, franchisees should ensure timely payments to avoid potential non-compliance fees or other penalties. It would be prudent for a prospective Cinnabon franchisee to clarify with the franchisor the specific consequences of late Royalty Fee payments to fully understand the financial obligations and potential penalties.