Do affiliate-owned Cinnaholic bakeries contribute to the Advertising Fund?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
so, and will not set maximum or minimum prices which you must charge.
Advertising. We provide advertising materials and services to you through a national advertising fund we have established and control (the "Advertising Fund"). You must participate in the Advertising Fund by contributing 2% of Gross Sales. All affiliate-owned Bakeries or Bakeries we own will also contribute to the Advertising Fund on an equal percentage basis with all franchised Bakeries. The Advertising Fund is established as a separate banking account and monies received from you will be accounted for separately from our other funds. There is no fiduciary or trust relationship created by our administering the Advertising Fund. We may cause the Advertising Fund to be incorporated or operated through a separate entity if we deem appropriate. (See Franchise Agreement, Section 11.2.) We anticipate all of our franchisees will contribute to the Advertising Fund, although there is no prohibition against us charging higher or lower rates for future franchisees. (See Franchise Agreement, Section 11.2.) We also may forgive, waive, settle, or compromise claims by or against the Advertising Fund. We may defer or reduce a franchisee's contribution. If we terminate the Advertising Fund, we will distribute all unused monies to the contributors in proportion to their respective contributions during a pre-determined period. For the 2024 fiscal year end, we collected $504,162.50 in the Ad Fund. We expended $444,137.79 in the following approximate proportions: Online Advertising ($89,825.20, or 20.22%), Social Media ($268,087.81, or 60.36%), Marketing Consultants ($61,800, or 13.91%), Creative ($12,846.00, or 2.89%), Publication Ads ($3,916.85, or .88%), Website ($6,030.88, or 1.36%), Administrative ($1,333.65, or .30%), and Miscellaneous ($297.40, or .08%). Fund expenses were more than Fund contributions during the year. $60,024.71 was collected in 2024, b
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 27–35)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, affiliate-owned bakeries are required to contribute to the Advertising Fund. Specifically, all affiliate-owned bakeries or bakeries that Cinnaholic owns will contribute to the Advertising Fund at the same percentage as franchised bakeries. This contribution is set at 2% of Gross Sales. The Advertising Fund is maintained as a separate banking account, ensuring that these funds are accounted for separately from Cinnaholic's other funds.
This arrangement ensures that both franchised and affiliate-owned Cinnaholic locations contribute proportionally to the advertising efforts, fostering a unified marketing strategy. For a prospective franchisee, this means that the advertising contributions are not solely the responsibility of franchisees but are shared with affiliate-owned locations, potentially increasing the overall advertising budget and impact. The funds collected are used for various advertising and marketing activities, including online advertising, social media, and marketing consultants.
For the 2024 fiscal year, Cinnaholic collected $504,162.50 for the Advertising Fund and expended $444,137.79. The expenses covered online advertising (20.22%), social media (60.36%), marketing consultants (13.91%), creative work (2.89%), publication ads (.88%), website maintenance (1.36%), administrative costs (.30%), and miscellaneous expenses (.08%). The unexpended balance of $60,024.71 was carried over for use in 2025 or later years. This provides transparency regarding how the advertising funds are managed and allocated, which can be a crucial factor for franchisees assessing the value of their contribution.