Under what conditions can the Advertising Contribution for Cinnabon bakeries (excluding Express Bakeries in a Schlotzsky's) be increased?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee1, 5 | Amount | Date Due | Remarks |
|---|---|---|---|
| Branded Bakeries): Currently, 2.5% of Net Sales Auntie Anne's Co Branded Bakeries in Other Locations: Currently, 2.5% of Net Sales attributed to Cinnabon and 2% of Net Sales attributed to Auntie Anne's Bakeries in Streetside Locations: Currently, 3% of Net Sales Swirl Bakeries (any location): Currently, 3% of Net Sales Express Bakeries in a Schlotzsky's: Not charged | You must contribute the Advertising Contribution to the Ad Fund (as defined in Item 11). For all Bakeries, except Express Bakeries in a Schlotzsky's, we may increase the Advertising Contribution at any time by notice to franchisees. However, your required Advertising Contribution and Local Marketing Obligation (as defined below) may not collectively exceed 5% of your Net Sales. This table indicates the current Advertising Contributions and already-announced scheduled increases. For Co-Branded Bakeries, we will collect the Advertising Contribution based on the portion of Net Sales attributable to products that we and Co Branded Franchisor have agreed to credit to the Cinnabon side of the Co-Branded Bakery, and the Co-Branded Franchisor will collect a separate advertising contribution (as specified in its Disclosure Document) based on the portion of Net Sales attributable to products that we and the Co Branded Franchisor have agreed to credit to the Co-Branded Franchise's side of the Co-Branded Bakery. |
Source: Item 6 — OTHER FEES (FDD pages 31–45)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, Cinnabon may increase the Advertising Contribution for all bakeries, except for Express Bakeries in a Schlotzsky's, at any time by providing notice to franchisees. However, the combined total of the required Advertising Contribution and the Local Marketing Obligation cannot exceed 5% of the franchisee's Net Sales. This condition ensures that franchisees have a limit on the total amount they must spend on advertising and marketing efforts.
This means that while Cinnabon retains the right to adjust the Advertising Contribution, franchisees are protected from excessive financial burdens related to advertising. The 5% cap provides a predictable framework for franchisees to manage their marketing expenses and allocate resources effectively.
It is important for prospective Cinnabon franchisees to understand how Net Sales are calculated, as this figure directly impacts both the Advertising Contribution and the Local Marketing Obligation. Net Sales will 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. Net Sales includes sales made from an SRU.