For a Cinnaholic franchise, what is the Advertising Fee based upon?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
11.2. Advertising Fund. In addition to all other amounts required to be paid hereunder, during the term hereof, Franchisee must pay to Franchisor, or such other entity designated by Franchisor, an amount based upon Gross Sales to be designated by Franchisor from time to time, in its sole discretion, provided such amount shall not exceed 2% of Gross Sales (the "Advertising Fee"), which amount shall be used by the Advertising Fund (as such term is hereinafter defined). The Advertising Fee shall be the same for all CINNAHOLIC® franchisees. Payment of the Advertising Fee shall be made on or before Tuesday of each week and be based upon Gross Sales of the Bakery for the preceding week. Advertising Fees shall be paid concurrently with the payment of the Royalty Fees.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, franchisees must pay an Advertising Fee based on Gross Sales. The amount is determined by Cinnaholic, but it cannot exceed 2% of Gross Sales. This fee is used for the Advertising Fund, which supports advertising materials and services on a national, regional, or local level. Franchisees must pay the Advertising Fee every Tuesday, based on the previous week's Gross Sales, at the same time as Royalty Fees.
The Advertising Fund is managed at Cinnaholic's discretion, and the company is not obligated to ensure that each franchise benefits proportionally to its contributions. The funds can cover various costs, including salaries, overhead, and the creation of advertising materials. Cinnaholic is not considered a trustee or fiduciary concerning the Advertising Fees collected.
In addition to the Advertising Fee, Cinnaholic franchisees must spend a reasonable amount each calendar quarter on local market advertising, but no less than 2% of Gross Sales per calendar quarter. Payments to Advertising Cooperatives, if required, are credited against these local advertising requirements. Franchisees must participate in any promotion, marketing, or advertising campaigns created by the Advertising Fund.