For a Cinnaholic franchise, can the Advertising Fee be used for public relations activities?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor agrees that all funds contributed to the Advertising Fund may be used to meet any and all costs (including, without limitation, reasonable salaries and overhead incurred by Franchisor) of maintaining, administering, directing and preparing national, regional or local advertising materials, programs and public relations activities including, without limitation, the costs of preparing and conducting television, radio, magazine, billboard, newspaper, direct response literature, direct mailings, brochures, collateral advertising material, implementing websites for Franchisor and/or its franchises, surveys of advertising effectiveness and other media programs and activities, employing advertising agencies to assist therewith and providing promotional brochures, decals and other marketing materials.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the Advertising Fee can be used for public relations activities. Franchisees must pay an Advertising Fee of up to 2% of Gross Sales, which Cinnaholic uses for the Advertising Fund. Cinnaholic has the discretion to use these funds for advertising materials, programs, and public relations activities on a national, regional, or local basis.
This means that a portion of the Advertising Fee paid by Cinnaholic franchisees may be allocated to public relations efforts managed by Cinnaholic. These efforts are intended to benefit all Cinnaholic bakeries by maximizing public recognition, brand identity, sales, and customer loyalty. However, Cinnaholic does not guarantee that each bakery will benefit proportionally to its contribution.
Cinnaholic retains control over how the Advertising Fund is spent, including public relations. The FDD specifies that these funds can cover the costs of preparing and conducting various advertising and public relations initiatives, such as television, radio, magazines, and websites. Franchisees are required to participate in any promotion, marketing, or advertising campaigns created by the Advertising Fund.
Prospective franchisees should consider that while the Advertising Fee supports public relations, Cinnaholic has the final say in how the funds are allocated. Franchisees are also expected to participate in advertising campaigns, indicating a collaborative approach to marketing and public relations efforts.