How are the fees that Cinnaholic receives from suppliers typically calculated?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
products they provide to our franchisees.
We and our affiliates have the right to receive payments or other benefits like rebates, discounts, and allowances from authorized suppliers based upon their dealings with you and other franchisees and we may use the monies we receive without restriction for any purpose we deem appropriate or necessary. Additionally, we have received rebates from various suppliers which we have placed directly into our Marketing Fund. Suppliers may pay us based upon the quantities of products the CINNAHOLIC® franchise system purchases from them. These fees will usually be based upon an amount per case or an amount per pound. We may receive fees from a supplier as a condition of our approval of that supplier. We do not provide material benefits to franchisees (for example, renewal of existing or granting additional franchises) based on their use of designated or approved suppliers. For the fiscal year ended December 31, 2024, we received $3,735 in rebates from Fun Express, $22,000 in rebates from Ventura
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 21–25)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the fees Cinnaholic receives from suppliers are typically based on the volume of products that the Cinnaholic franchise system purchases from those suppliers. These fees are usually calculated either as an amount per case or an amount per pound of the products purchased. Cinnaholic also mentions that they may receive fees from a supplier as a condition of approving that supplier.
For franchisees, this means that the cost of goods could be influenced by these supplier fees, although the FDD does not specify whether these fees are passed on directly. It's important to note that Cinnaholic retains the right to use the monies received from suppliers without restriction for any purpose they deem appropriate or necessary, and they are not obligated to provide material benefits to franchisees based on their use of designated or approved suppliers.
In 2024, Cinnaholic received specific rebates from suppliers, including $3,735 from Fun Express, $22,000 from Ventura Foods, and $6,523 from Saebert. These rebates were placed directly into their Marketing Fund. Prospective franchisees should inquire about how supplier agreements are negotiated, how these fees might affect product costs, and how the Marketing Fund is managed to ensure transparency and understand the potential impact on their business operations.