For a Cinnaholic franchise, can the Advertising Fund be used to provide promotional brochures?
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 to provide promotional brochures. Cinnaholic franchisees are required to pay an Advertising Fee, which cannot exceed 2% of Gross Sales. This fee is used for the Advertising Fund, which supports the recognition, brand identity, sales, and patronage of Cinnaholic bakeries.
The Advertising Fund is managed by Cinnaholic, who has the discretion to use the funds for various advertising materials and services on a national, regional, or local basis. These materials and services include television, radio, print, direct response literature, direct mailings, and brochures. The funds can also cover the costs of maintaining and administering advertising programs, including salaries and overhead incurred by Cinnaholic.
Cinnaholic does not guarantee that the Advertising Fund will benefit each bakery in proportion to its contributions. Franchisees are also required to participate in any promotion, marketing, or advertising campaigns created by the Advertising Fund. A financial statement of the Advertising Fund's operations will be prepared annually and made available to franchisees upon request.