For a Cinnaholic franchise, is the Advertising Fee paid concurrently with any other fees?
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 the 2025 Cinnaholic Franchise Disclosure Document, the Advertising Fee is paid concurrently with the Royalty Fees. Franchisees must pay the Advertising Fee, which cannot exceed 2% of Gross Sales, to Cinnaholic or an entity they designate. This payment is due every Tuesday, based on the previous week's Gross Sales.
The Advertising Fee is used for the Advertising Fund, which supports the Cinnaholic brand through various advertising materials and services at the national, regional, or local level. Cinnaholic retains control over how these funds are spent, aiming to maximize brand recognition and sales for all Cinnaholic bakeries. However, there is no guarantee that each bakery will benefit proportionally to its contributions.
This concurrent payment structure means that franchisees need to manage their cash flow to cover both the Advertising Fee and Royalty Fee on a weekly basis. Prospective franchisees should factor this into their financial planning and ensure they understand how Gross Sales are calculated, as these fees are directly tied to revenue. Additionally, franchisees should be aware that they are also required to spend a minimum of 2% of Gross Sales per calendar quarter on local market advertising, separate from the Advertising Fee.