Are Cinnaholic bakeries owned by the franchisor required to contribute to the Advertising Fund?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
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.)
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, all affiliate-owned bakeries or bakeries that Cinnaholic owns are required to contribute to the Advertising Fund. These contributions must be made on an equal percentage basis with all franchised bakeries. The contribution is 2% of Gross Sales.
This means that Cinnaholic itself is held to the same standard as its franchisees regarding advertising contributions. This policy ensures that corporate-owned stores are equally invested in the brand's marketing efforts, aligning their interests with those of the franchisees.
For a prospective franchisee, this indicates a commitment from Cinnaholic to support the advertising fund alongside its franchisees. It also demonstrates transparency and fairness in how advertising funds are collected and managed across the Cinnaholic system.