What are Cinnaholic's marketing fund fees restricted to?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
chise agreement. The non-refundable franchise fees received but not yet earned as of December 31, 2024 and 2023, were $2,728,141 and $3,288,772, respectively. Prepaid commissions paid but not expensed as of December 31, 2024 and 2023, were $884,883 and $972,229, respectively.
5. MARKETING FUND FEES
The Company's franchise agreement allo
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 61)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the marketing fund fees that Cinnaholic collects from its franchisees are specifically restricted for use in brand name and franchise advertising. This means that the money contributed to the marketing fund can only be used to promote the Cinnaholic brand and attract more customers to the franchise system. Any funds that are collected but not used are carried forward to be used in subsequent periods.
For a prospective Cinnaholic franchisee, this restriction offers some assurance that their contributions to the marketing fund will be used to benefit the entire franchise network. Knowing that the funds are dedicated to advertising and brand promotion can provide confidence that the money is being used to increase brand awareness and drive sales.
In 2024 and 2023, Cinnaholic collected and expended $309,415 and $610,238 respectively, for marketing fund fees. The FDD also states that the marketing fund fees collected but not yet spent as of December 31, 2024 and 2023 were $0 and $0, respectively. This indicates that Cinnaholic is actively using the marketing funds collected from franchisees for their intended purpose.