Does Cinnaholic have sole discretion over the allocation of advertising programs developed with funds from the Advertising Fund?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
We use the Advertising Fund to create, among other things, promotional advertising, marketing programs, market research and marketing and advertising activities. We direct all advertising programs developed with funds from the Advertising Fund and have sole discretion over the creative concepts, materials, media used, media placement, and allocation of these programs. Any advertising program or campaign we develop may include dissemination of advertising through print, radio, television, point-of-purchase materials, or other media. This coverage may be local, regional, or national in scope. We may employ an advertising agency or other agency to assist in the development, production, and dissemination of advertising materials, or we may hire personnel to perform these functions. We have no obligation to spend any amount on advertising in the area where your Bakery is located. (See Franchise Agreement, Section 11.2.) In fact, we have no obligation to spend the Advertising Funds to benefit all franchisees or to ensure the monies are used proportionately or equivalent to a franchisee's contributions to the Advertising Fund.
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, Cinnaholic retains sole discretion over the advertising programs developed with funds from the Advertising Fund. This means Cinnaholic has the authority to decide on the creative concepts, materials, media used, media placement, and the allocation of these advertising programs.
This discretion extends to various advertising channels, including print, radio, television, and point-of-purchase materials, with coverage potentially spanning local, regional, or national levels. Cinnaholic can employ advertising agencies or hire personnel to assist in these activities.
Importantly, Cinnaholic is not obligated to spend any specific amount on advertising in the area where a franchisee's bakery is located, nor are they required to ensure that the Advertising Funds benefit all franchisees proportionately to their contributions. This could mean that a franchisee's contributions to the Advertising Fund may not directly translate into advertising benefiting their specific location. Franchisees should consider this when evaluating the potential benefits of the advertising program.