Does Cinnaholic have the right to charge higher or lower Advertising Fund rates for future franchisees?

According to Cinnaholic's 2025 Franchise Disclosure Document, Cinnaholic has the right to charge future franchisees different Advertising Fund rates. While Cinnaholic anticipates that all franchisees will contribute to the Advertising Fund, the document states that there is no prohibition against Cinnaholic charging higher or lower rates for future franchisees. Currently, franchisees must contribute 2% of Gross Sales to the Advertising Fund.

This flexibility allows Cinnaholic to adjust advertising contributions based on various factors, such as the franchisee's location, market conditions, or the specific terms negotiated in their franchise agreement. This could mean that some franchisees might be required to contribute more or less than the standard 2% of gross sales.

For a prospective franchisee, this clause introduces an element of uncertainty. It is essential to clarify during negotiations what advertising fund contribution rate will apply to their specific franchise agreement. Understanding this aspect is crucial for accurate financial planning and assessing the overall cost of investment in a Cinnaholic franchise. Franchisees should also inquire about the conditions under which Cinnaholic might exercise this right to charge different rates.