According to Cinnaholic's 2025 Franchise Disclosure Document, the company records non-refundable franchise fees, net of amounts earned based on allowable direct services, as deferred revenues, to be recognized over the life of the franchise agreement. As of December 31, 2023, the non-refundable franchise fees received but not yet earned were $3,288,772.

This means that Cinnaholic collected $3,288,772 in non-refundable franchise fees during 2023, but this amount was not yet recognized as earned revenue on the company's income statement. Instead, it was recorded as deferred revenue, a liability on the balance sheet, and will be recognized as revenue over the term of the franchise agreements. This accounting treatment is standard practice in the franchise industry, as it aligns revenue recognition with the period in which the franchisor provides ongoing services and support to the franchisees.

It is important to note that this figure represents the total amount of franchise fees collected, not necessarily the amount of cash Cinnaholic had on hand. The funds could have been used for various business purposes, such as covering operating expenses or investing in growth initiatives. Additionally, the FDD also mentions that the cash balances in the company's account as of December 31, 2023 was $42,590.