What was the total amount of Cinnaholic's Advertising Fund Liability?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
Current Assets | $2,487,071.19 | | Other Assets | | | Accounts Receivable - Accrual | 174,944.79 | | Inter-Company Receivable Athens | 0.00 | | Notes Receivable - F4 Investments | 0.18 | | Total Other Assets | $174,944.97 | | TOTAL ASSETS | $2,662,016.16 |
Balance Sheet As of April 30, 2025
| TOTAL | |
|---|---|
| LIABILITIES AND EQUITY | |
| Liabilities | |
| Current Liabilities | |
| Other Current Liabilities | |
| Accounts Payable Accrual | 13,282.0 |
| Advertising Fund Liability | 10,218.00 |
| Deferred revenues - ST |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 61)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the Advertising Fund Liability is listed as $10,218.00. This figure represents the amount of marketing funds collected from franchisees that had not yet been spent by Cinnaholic as of the financial statement date. These funds are specifically earmarked for advertising and marketing activities to benefit the Cinnaholic brand and franchise system.
For a prospective Cinnaholic franchisee, this liability indicates that there is a dedicated pool of money reserved for marketing purposes. The existence of an advertising fund liability suggests that Cinnaholic is actively collecting and managing marketing funds, which could be a positive sign for franchisees who rely on brand-level marketing efforts to drive business.
However, franchisees should also investigate how these funds are being used and what specific marketing initiatives are planned. It is important to understand the criteria for fund allocation, the types of advertising campaigns conducted, and the overall effectiveness of the marketing strategy. Additionally, franchisees may want to inquire about the policies governing the advertising fund, including transparency in fund management and franchisee input on marketing decisions.
It's also worth noting that while the balance sheet shows a liability of $10,218.00, another section of the FDD states that marketing fund fees collected but not yet spent as of December 31, 2024 and 2023 were $0 and $0, respectively. This discrepancy should be clarified with Cinnaholic to ensure a clear understanding of the advertising fund's financial status.