What was the amount of royalties collected by Cinnaholic in the year ended December 3, 2023?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
Liabilities | 996,666 | 1,143,328 | | Contract liability, net of current | 2,259,702 | 2,887,231 | | Members' (Deficit) | (1,710,293) | (2,290,083) | | Total Liabilities and Members' (Deficit) | $ 1,546,075 | $ 1,740,476 |
CINNAHOLIC FRANCHISING LLC STATEMENTS OF OPERATIONS AND MEMBERS' (DEFICIT)
| YEARS ENDED DECEMBER 3 | |||
|---|---|---|---|
| 2024 | 2023 | ||
| Revenues | |||
| Royalties | $ 1,481,750 | $ 1,326,887 | |
| Franchise fees | 1,181,694 | 952,228 | |
| Marketing fund fees | 309,415 | 610,238 | |
| Other | 546,080 3,518,939 | 32,604 2,921,957 | |
| Operating Expenses | 3,047,740 | 3,226,402 | |
| Loss from Operations | 471,199 | (304,445) | |
| Gain (Loss) on trading s |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 61)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the royalties collected for the year ended December 31, 2023, amounted to $1,326,887. This figure represents the income Cinnaholic Franchising LLC received from its franchisees based on a percentage of their sales. Royalties are a standard component of franchise agreements, serving as ongoing compensation to the franchisor for the use of its brand, systems, and support.
For a prospective Cinnaholic franchisee, understanding the royalty structure is crucial. This $1,326,887 represents the total royalties paid by all franchisees during that year, but an individual franchisee's contribution would depend on their specific sales figures and the royalty rate stipulated in their franchise agreement. Franchisees need to factor this ongoing expense into their financial projections to assess the profitability of their Cinnaholic location.
It's also important to note that royalty payments typically continue throughout the term of the franchise agreement. Therefore, franchisees should carefully review the terms outlined in the FDD and franchise agreement to fully understand their royalty obligations and how they may impact their overall financial performance. This information, combined with other financial data in the FDD, helps potential franchisees make informed decisions about investing in a Cinnaholic franchise.