Can Cinnaholic defer or reduce a franchisee's contribution to the Advertising Fund?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
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, Cinnaholic may defer or reduce a franchisee's contribution to the Advertising Fund. The Advertising Fund is used by Cinnaholic to create promotional advertising, marketing programs, market research, and other marketing and advertising activities. Cinnaholic directs all advertising programs developed with funds from the Advertising Fund and has sole discretion over the creative concepts, materials, media used, media placement, and allocation of these programs.
Cinnaholic requires franchisees to contribute 2% of gross sales to the Advertising Fund. All affiliate-owned bakeries or bakeries that Cinnaholic owns 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 the monies received from franchisees will be accounted for separately from Cinnaholic's other funds.
For the 2024 fiscal year end, Cinnaholic collected $504,162.50 in the Ad Fund and expended $444,137.79. The expenses were allocated in the following approximate proportions: Online Advertising (20.22%), Social Media (60.36%), Marketing Consultants (13.91%), Creative (2.89%), Publication Ads (.88%), Website (1.36%), Administrative (.30%), and Miscellaneous (.08%). $60,024.71 was collected in 2024, but not expended, and remains in the Fund for use in 2025 or later years.