When are Advertising Cooperative fees due for a Cinnaholic franchise?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
nitial fees.
ITEM 6 OTHER FEES
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee | 5% of Gross Sales unless you are in default for failure to maintain standards | Every Tuesday for the preceding week's Gross Sales | We will debit your bank account for the Royalty Fee due. See Notes 2 and 7. |
| Advertising Fund Fee | 2% of Gross Sales | Same as Royalty Fee | See Item 11 and Note 7. |
| Advertising Cooperatives | May not exceed 2% of Gross Sales. See Note 3 | Same as Royalty Fee or as designated by your cooperative | See Item 11 and Notes 3 and 7. |
| Local Advertising | A minimum of 2% of Gross Sales | As incurred | You must make local advertising expenditures as required by Section 11.3 of the Franchise Agreement. You may determine the form and media, subject to our approval before you make the expenditures. |
| Advertising Deficiency | Amount of Local Advertising Deficiency | Immediately upon demand | If you fail to make local advertising expenditures, we may do so on your behalf and you will reimburse us for those expenditures. |
| Renewal Fee | 50% of the amount of the then-current initial franchise fee | Before renewal | Payable when, and if, you renew your Franchise Agreement. There are other conditions to renew (see Item 17 of this Disclosure Document). |
Source: Item 6 — OTHER FEES (FDD pages 13–17)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the due date for Advertising Cooperative fees is either the same as the Royalty Fee, which is every Tuesday for the preceding week's Gross Sales, or as designated by your cooperative. The amount may not exceed 2% of Gross Sales. Cinnaholic requires that all advertising cooperative contributions must be paid by automated bank draft, so franchisees must sign an electronic transfer of funds authorization for their bank account. Note 3 further clarifies that all members of an advertising cooperative (whether a franchisee-owned, company-owned or affiliate-owned Bakery) have equal voting rights on all matters brought before the advertising cooperative for a vote including, without limitation, matters relating to the amount of required contributions. Amounts paid to an advertising cooperative will be credited against your required expenditures for local advertising under Section 11.3 of the Franchise Agreement.
This means that a Cinnaholic franchisee's payment schedule for advertising cooperative fees can vary depending on the rules established by the specific cooperative they join. However, the FDD stipulates that the fees cannot exceed 2% of gross sales. The franchisee needs to be prepared to potentially pay these fees weekly, similar to royalty and advertising fund fees, or according to a different schedule set by the cooperative.
It is important for prospective franchisees to understand that participation in an advertising cooperative is subject to the cooperative's rules and regulations, including payment schedules. Franchisees should inquire about the specific advertising cooperatives available in their area, their contribution requirements, and their payment schedules to accurately budget for these expenses. The franchisee also has equal voting rights on all matters brought before the advertising cooperative.