What was the total amount of advertising fund liability for Cinnaholic as of December 31, 2023?
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 | 1,013,889.00 |
| Direct Deposit Payable | 0.0 |
| Gift Cards | 7,370.7 |
| Interest Payable | 10,661.00 |
| Loan from On Deck | 0.00 |
| Loan from SBA | 0.00 |
| Payroll Liabilities | 295,119.69 |
| Total Other Current Liabilities | $1,350,540.43 |
| Total Current Liabilities | $1,350,540.43 |
| Long-Term Liabilities | |
| Cinnaholic Canada | 440,959.00 |
| Deferred Revenues | 2,632,111.00 |
| Loan from Canada | 0.00 |
| Notes Payable | 0.00 |
| Loan from Daryl Dollinger | 55,000.00 |
| Total Notes Payable | 55,000.00 |
| Total Long-Term Liabilities | $3,128,070.00 |
| Total Liabilities | $4,478,610.43 |
| Equity | |
| Equity Correction Account | -0.02 |
| Opening Balance Equity | 9.84 |
| Other Comprehensive Income | 0.49 |
| Retained Earnings | -1,506,115.4 |
| Shareholder Distribution - Daryl I Dollinger | -113,696.00 |
| Shareholder Distribution - Florian Radke | -105,361.0 |
| Shareholder Distribution - Spencer Reid | -170,750.0 |
| Shareholder Distributions |
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 as of December 31, 2023, was $10,218. This figure represents the amount of marketing fund fees that Cinnaholic had collected but not yet spent as of that date. These funds are specifically earmarked for brand name and franchise advertising, as outlined in the franchise agreement. Any unspent funds are carried forward for use in subsequent periods.
For a prospective Cinnaholic franchisee, this information provides insight into how the company manages its advertising funds. The advertising fund liability indicates that Cinnaholic retains unspent advertising fees, which are intended to benefit the franchise system through future marketing efforts. This could be viewed positively, as it suggests a commitment to ongoing brand promotion.
However, franchisees may want to inquire about Cinnaholic's specific plans for utilizing these accumulated funds. Understanding the intended advertising strategies and how they align with individual franchise locations' needs is crucial. Additionally, franchisees might want to understand how the advertising fund is managed and what oversight they have, if any, on how the funds are spent. It is also worth noting that while the FDD states that the franchise agreement allows for the collection of marketing fund fees, it does not specify the percentage or amount that franchisees are required to contribute.