Does Cinnaholic have a fiduciary or trust relationship by administering 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, Cinnaholic does not have a fiduciary or trust relationship by administering the Advertising Fund. The document specifies that 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.
Cinnaholic franchisees are required to contribute 2% of Gross Sales to the Advertising Fund, and all affiliate-owned Bakeries or Bakeries owned by Cinnaholic will contribute to the Advertising Fund on an equal percentage basis. The funds are used to create promotional advertising, marketing programs, market research, and marketing and advertising activities. Cinnaholic has sole discretion over the creative concepts, materials, media used, media placement, and allocation of these programs.
For the 2024 fiscal year end, Cinnaholic collected $504,162.50 in the Ad Fund and expended $444,137.79. The expenses were allocated to 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%). A remaining balance of $60,024.71 was collected in 2024, but not expended, and remains in the Fund for use in 2025 or later years. Cinnaholic may use collection agents and bring legal proceedings to collect amounts owed to the Fund.