If Cinnaholic terminates the Advertising Fund, how will the unused monies be distributed?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
e Advertising Fund. We may defer or reduce a franchisee's contribution. If we terminate the Advertising Fund, we will distribute all unused monies to the contributors in proportion to their respective contributions during a pre-determined period. For the 2024 fiscal year end, we collected $504,162.50 in the Ad Fund. We expended $444,137.79 in the following approximate proportions: Online Advertising ($89,825.20, or 20.22%), Social Media ($268,087.81, or 60.36%), Marketing Consultants ($61,800, or 13.91%), Creative ($12,846.00, or 2.89%), Publication Ads ($3,916.85, or .88%), Website ($6,030.88, or 1.36%), Administrative ($1,333.65, or .30%), and Miscellaneous ($297.40, or .08%). Fund expenses were more than Fund contributions during the year. $60,024.71 was collected in 2024, b
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 27–35)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, if Cinnaholic terminates the Advertising Fund, all unused monies will be distributed to the contributors. The distribution will be in proportion to each contributor's respective contributions during a pre-determined period. This means that franchisees who contributed more to the Advertising Fund during that period would receive a larger share of the remaining funds.
For a prospective Cinnaholic franchisee, this clause provides some assurance that advertising fees are used responsibly. If the Advertising Fund is terminated, franchisees have a right to receive a portion of the remaining funds back, based on their contributions. This is a fairly standard practice in franchising, as advertising funds are typically meant to benefit the franchisees who contribute to them.
In 2024, Cinnaholic collected $504,162.50 in the Ad Fund and expended $444,137.79. The expenses covered online advertising, social media, marketing consultants, creative work, publication ads, website maintenance, administrative costs, and miscellaneous expenses. At the end of the 2024 fiscal year, $60,024.71 remained in the fund for use in 2025 or later years. This demonstrates that Cinnaholic does not necessarily spend all contributions in the same year they are collected, and unspent funds are carried over for future use.