When is the Cinnaholic royalty fee payment due?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
that the Franchise Fee is paid as consideration for Franchisor granting Franchisee the right to develop, open and operate the Bakery using the Marks and the CINNAHOLIC® System and that the Franchise Fee is fully earned by Franchisor at the time this Agreement is executed, and the Franchise Fee shall not be refundable for any reason.
5. ROYALTY FEE; METHOD OF PAYMENT; LATE PAYMENT
- 5.1. Royalty Fee. In addition to all other amounts required to be paid hereunder, during the term hereof, Franchisee agrees to pay to Franchisor for the rights granted hereunder a royalty fee equal to 5% of the Gross Sales (as such term is hereinafter defined) of the Bakery (the "Royalty Fee"). Payment of the Royalty Fee shall be made on or before Tuesday of each week for Gross Sales of the Bakery for the preceding week. Franchisee acknowledges and agrees that in the event Franchisee is in default of this Agreement for failure to comply with any of the operational standards or specifications
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the royalty fee, which is 5% of the bakery's gross sales, must be paid on or before Tuesday of each week. This payment covers the gross sales from the preceding week.
Cinnaholic also stipulates that if a franchisee fails to meet operational standards or doesn't adhere to obligations outlined in Section 9 of the agreement, Cinnaholic has the right to increase the royalty fee to 10% of gross sales. Additionally, a surcharge of $250 per week, or a pro-rata portion of the week, may be imposed until the defaults are corrected.
This weekly payment schedule and the potential for increased fees highlight the importance of maintaining operational compliance and financial responsibility for Cinnaholic franchisees. It is a fairly standard practice in the franchise industry to have royalty fees paid weekly or monthly, but the penalty for non-compliance is something a franchisee should be aware of.