For a Cinnaholic franchise, can the Advertising Fund be used to provide other marketing materials?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
The Advertising Fee will be expended for the benefit of Franchisor, Franchisee and all other franchisees or users of the CINNAHOLIC® for the production or purchase of such radio, television, print and/or other advertising materials or services as Franchisor deems necessary or appropriate, in its sole discretion, on a national, regional or local basis (the "Advertising Fund"). The expenditure of such funds for advertising is to be under the control of, and in the discretion of, Franchisor at all times, or such other entities designated by Franchisor. Franchisee understands and acknowledges that the Advertising Fund is intended to maximize and support general public recognition, brand identity, sales and patronage of CINNAHOLIC® Bakeries for the benefit of all CINNAHOLIC® Bakeries and that Franchisor undertakes no obligation to ensure that the Advertising Fund benefits each CINNAHOLIC® Bakery in proportion to its respective contributions. 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 Fund can be used for the purchase of marketing materials. Franchisees must pay an Advertising Fee of up to 2% of Gross Sales, which Cinnaholic uses to support brand recognition and sales.
The Advertising Fund can be used to cover the costs of preparing advertising and promotional materials. These materials include brochures, decals, and other marketing items. Cinnaholic has full discretion over how the Advertising Fund is spent, and it is not obligated to ensure that each Cinnaholic Bakery benefits in direct proportion to its contributions.
Cinnaholic details that the Advertising Fund can cover costs related to creating advertising materials, programs, and public relations activities. These activities include television, radio, magazine, billboard, newspaper, direct response literature, and direct mailings. The fund can also be used for implementing websites for Cinnaholic and its franchisees, conducting surveys, and employing advertising agencies. This provides Cinnaholic with the flexibility to use a range of marketing materials and strategies to promote the brand.