When is the Royalty Fee due for a Cinnaholic franchise?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee | 5% of Gross Sales unless you are in default for failure to maintain standards | Every Tuesday for the preceding week's Gross Sales | We will debit your bank account for the Royalty Fee due. See Notes 2 and 7. |
Note 2: "Gross Sales" means the amount of sales of all products and services sold in, on, about or from the Bakery, together with any other revenues derived from the operation of the Bakery, whether by you or by any other person, whether or not in accordance with the terms of the Franchise Agreement, and whether for cash or on a charge, credit, barter or time basis, including, but not limited to, all sales and services (i) where orders originate and/or are accepted by you in the Bakery but delivery or performance of the order is made from or at any place other than the Bakery or (ii) per telephone or other similar orders received or filled at or in the Bakery. For purposes of determining the Royalty Fee and Advertising Fee, there shall be deducted from Gross Sales: (a) the amount of refunds, allowances or discounts to customers (including coupon sales) up to 10% of the Gross Sales, provided the related sales have previously been included in Gross Sales; and (b) the amount of any excise or sales tax levied upon retail sales and paid over to the appropriate governmental authority. If you are in default of the franchise agreement for failure to meet minimum operational standards, we can increase the royalty to 10% of Gross Sales and charge an additional $250 each week until you rectify the deficiencies.
Note 7: Under the Franchise Agreement, we require that all royalty and advertising fees and advertising cooperative contributions must be paid by automated bank draft. Accordingly, you must sign an electronic transfer of funds authorization for your bank account.
Source: Item 6 — OTHER FEES (FDD pages 13–17)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the Royalty Fee, which is 5% of Gross Sales unless the franchisee is in default for failure to maintain standards, is due every Tuesday for the preceding week's Gross Sales. Cinnaholic will debit the franchisee's bank account for the Royalty Fee due. This is a common practice in franchising, where royalty fees are typically a percentage of gross sales. However, the weekly payment schedule may differ from other franchises that collect royalties monthly.
It is important to note that Cinnaholic requires all royalty and advertising fees and advertising cooperative contributions to be paid by automated bank draft. Therefore, as a franchisee, you must sign an electronic transfer of funds authorization for your bank account. This ensures timely payments and simplifies the process for both the franchisee and Cinnaholic.
If a Cinnaholic franchisee defaults on maintaining minimum operational standards, the royalty fee can increase to 10% of Gross Sales, and an additional $250 can be charged each week until the deficiencies are rectified. This highlights the importance of adhering to Cinnaholic's operational standards to avoid increased fees. The definition of Gross Sales includes all sales of products and services sold in, on, about, or from the Bakery, with specific deductions allowed for customer refunds, allowances, discounts (up to 10% of Gross Sales), and excise or sales taxes levied upon retail sales.