Year Business Began: 1985
Franchising Since: 1986
Headquarters: Atlanta, Georgia
Estimated Number of Units: 1,810
Franchise Description: Cinnabon Franchisor SPV LLC, the franchisor, is a wholly-owned subsidiary of FOCUS Brands Systems LLC. Cinnabon bakeries are retail stores that sell fresh baked cinnamon rolls and related products, which may include alcoholic beverages. There are six types of franchises offered:
- Full Bakery: A bakery where the franchisee produces and sells a full range of Cinnabon products. Full bakeries typically are in-line or kiosk locations.
- Express Bakery: A bakery where the franchisee produces and sells a limited selection of Cinnabon products. Express bakeries are typically located in the space of another restaurant, food service facility, or business approved by the franchisor.
- Concession Bakery: A bakery location at a fair, show, market, or other special event in a concession trailer or food truck where franchisees produce and sell a limited range of Cinnabon products.
- Auntie Anne’s Co-Branded Bakery: A full bakery where franchisees produce and sell a range of Cinnabon products in conjunction with those products authorized to be sold under the Auntie Anne’s franchise system.
- Carvel Co-Branded Bakery: A full bakery where you produce and sell a range of Cinnabon products in conjunction with those products authorized to be sold under the Carvel franchise system.
- Swirl Bakery: A Carvel Co-Branded Bakery that operates under the “Cinnabon Swirl” mark and trade dress and offers a unique menu that offers traditional Carvel and Cinnabon products in addition to hybrid menu items that combine products and ingredients from both brands.
- Training Overview: Required trainees (including one manager (who may be the franchisee or the primary contact), one other employee involved in the operation of the business, and any other individuals that the franchisor designates) must attend and successfully complete to the franchisor’s satisfaction the Management Training Program (which is commonly referred to as “WOW University”). All or certain portions of the Management Training Program may, in the franchisor’s discretion, be conducted online or in person at the franchisor’s corporate headquarters in Atlanta, Georgia or other locations authorized by the franchisor. The franchisor also recommends that they attend the opening of another franchisee’s bakery before they open their own bakery. If franchisees operate a co-branded bakery, they will also need to attend the initial training program provided by the applicable co-branded franchisor, as described in its Franchise Disclosure Document. The franchisor may, from time to time, conduct conferences, conventions, programs, webinars, teleconferences, or training sessions on any matters related to the system.
Territory Granted: The Franchise Agreement licenses the franchisee to manufacture and sell Cinnabon products at retail only from a specific full bakery or express bakery location that the franchisor accepts. The franchisor does not grant franchisees any exclusive territory or other territorial rights under these agreements other than the right to sell Cinnabon products at retail from the bakery.
Obligations and Restrictions: Franchisees are required to devote their best efforts to the proper and effective operation of the bakery. Franchisees (if they are an individual) and their owners (if they are an entity) are not required to participate in the actual operation of the bakery but may serve as the primary contact and/or a manager. However, the franchisor does not recommend an investment in a bakery for investors interested in an absentee management business. Franchisees may offer in the bakery to customers only the approved products that the franchisor has approved in writing. Franchisees must produce and sell all approved products it specifies, including all menu items and other products and services that the franchisor requires franchisees to sell, as stated in the manuals or otherwise, which are all part of the system.
Term of Agreement and Renewal: For full bakeries, the length of the initial franchise term is 20 years with an option to renew for an additional 20 years, if renewal requirements are met. For express bakeries, the length of the initial franchise term is five years with an option to renew for five years, if renewal requirements are met. For concession bakeries, the length of the initial franchise term is five years with no renewal option.
Financial Assistance: The franchisor does not offer financing for trade fixtures, opening inventory, or any other purpose. The franchisor may refer franchisees to leasing or financing companies not affiliated with it. Currently, the franchisor will not guarantee the franchisee’s note, lease, or obligation, for any lender, or any other person or entity.
Investment Tables:
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $30,500 | $30,500 |
| Construction and Build Out Costs | $97,000 | $262,000 |
| Permitting | $500 | $1,000 |
| Equipment Package | $25,000 | $109,000 |
| Millwork | $20,000 | $42,000 |
| Menu Board, Graphics and Interior Signage | $3,900 | $13,500 |
| Exterior Signage | $2,500 | $15,000 |
| Computer System | $6,000 | $24,000 |
| Smallwares | $2,500 | $5,000 |
| Architect/Engineer | $6,500 | $12,000 |
| Rent | $4,000 | $10,000 |
| Grand Opening Marketing | $2,500 | $7,500 |
| Legal and Accounting Fees | $5,000 | $10,000 |
| Insurance | $1,200 | $6,600 |
| Misc. Opening Costs/Office Supplies | $1,800 | $6,800 |
| Security Deposits | $0 | $15,000 |
| Training and Support Fees | $0 | $3,500 |
| Travel and Living Expenses During Training | $3,500 | $7,500 |
| Opening Inventory | $5,000 | $8,000 |
| Additional Funds (3 months) | $15,000 | $30,000 |
| ESTIMATED TOTAL* | $232,400 | $621,400 |
*The estimated initial investment range covers a full bakery in a traditional location. Please see FDD for details on other franchise types.
| Type of Fee | Amount |
|---|---|
| Royalty | For full bakeries, express bakeries (that are not in a Schlotzsky’s), concession bakeries, and co-branded bakeries: 6.0% of net sales. |
| Advertising Contribution | Currently, 1.5% of net sales. 3% of net sales for bakeries located in streetside locations and swirl bakeries. |
| Advertising Cooperative Contribution | An amount set by the franchisee’s advertising cooperative. |
| Local Marketing Obligation | Each calendar quarter, franchisees must spend not less than 1% of net sales on local market advertising. |
| Promotions | Costs to purchase, lease and install all materials necessary for promotional campaigns, including counter cards, posters, banners, signs, photographs, give-away items and gift cards. The franchisor may charge franchisees its costs plus a reasonable administrative fee. |
| Insufficient Funds Fee | The franchisor’s out-of-pocket costs and an administrative fee. |
| Interest | The lesser of 1.5% per month or maximum legal interest rate. |
| Late Reporting Fee | Currently, $50 per day. |
| Taxes and Other Payments | The franchisor’s cost. |
| Subsequent Trainee Initial Training Fee | Currently, up to $500 per trainee. |
| On-Site Training and Assistance | A reasonable fee, currently, $500 per hour plus travel and living expenses. |
| Additional Support/Consulting Fee | A reasonable fee, currently, $500 per day, plus travel and living expenses. |
| Conference/Program Fee | A reasonable fee, which will vary by program. |
| Training Cancellation Fee | The franchisor’s out of pocket costs. |
| Learning Management System License Fee | The then-current fee. |
| Carvel Product Platform Training Fee | The franchisor may charge a reasonable fee up to $750. |
| Plan Review Fee | $1,000 per set of drawings. |
| Lease Renewal Fee/Extension Assistance Fee | The then-current fee. Currently, $2,000. |
| Lease Documentation Late Fee | $500 per month (or partial month) until delivered. |
| SRU Initial Setup and Rental Fees | If the franchisor grants franchisees the right to participate in the SRU Program and they lease the SRU, franchisees will incur these initial setup and ongoing fees. The maximum SRU monthly rental fee will vary based on the type of SRU. |
| SRU Training Fees | $750 as incurred. |
| SRU Lease Termination Fees | Franchisor’s expenses. |
| Remote Location Baking License Fee | $3,000 per year. |
| Relocation Fee | 10% of the then-current initial franchise fee. |
| Relocation Extension Fee | $1,500 per year that the term is extended. |
| Refresh/ Remodel Site Survey and Design Fee | The then-current fee. Currently, such fee is approximately $1,200 to $6,000 depending on the scope of the required changes. |
| Refresh/ Remodel Site Survey and Design Solution Fee | The then-current fee. Currently, the franchisor does not charge this fee, but it estimates that such fee, if charged today for a remodel, would be approximately $4,000. |
| Transfer Fee | 50% of the then-current initial franchise fee if it is a control transfer; if it is a transfer to a related party or that is a not a control transfer, 10% of the then-current initial franchise fee. |
| Systems Administration Fee | The then-current fee, which is currently estimated to be between $1,500 to $2,000. |
| Renewal Fee | 20% of the then-current initial franchise fee for the type of bakery the franchisee will operate. |
| Computer Systems Fee | A reasonable fee, which will vary based on the services the franchisor provided. |
| POS System Support Fee | Currently, estimated to be between $70 and $250 per month. |
| Non-Focus Brands Portfolio POS Menu Setup | A reasonable fee, currently estimated to be $500 per day. |
| Mobile Device Management Software License Fee | Currently, estimated to be between $6 and $30 per month. |
| Back Office and Polling Software Fee | Currently not charged. Estimated to be between $100 and $200 per month. |
| Credit Card Fees | Transaction fees estimated to be from 2.5% to 5.0% of transaction amounts. Other fees may apply depending on the vendor used for credit card processing. |
| Information Security and Compliance Fees | Amount of fees; estimated to be between $75 and $150 per month. |
| Gift Card and Loyalty Program Fees | Amount of administrative fees. |
| Loyalty App Fee | Currently, $51 per month. |
| Online Ordering Fee | Currently, $45 per month, plus a per transaction fee (estimated to be less than $0.02 per transaction) and additional charges based on services subscribed to. |
| Ordering Support Fee | A reasonable fee, which will vary based on the services provided. |
| Purchasing Program Fee | Reasonable membership fees assessed by the purchasing program. |
| Supply Chain Fee | Currently $0.22 to $0.27 per case purchased through certain appointed distributors. |
| Master Insurance Policy Fee | Currently not charged; the franchisor does not have an estimate at this time. |
| Insurance | Amount of unpaid premiums and the franchisor’s costs. |
| Guest Relations Fee | Currently, $30 for each guest complaint or other contact request that franchisees do not timely respond to or for each excessive guest complaint. |
| Non-Compliance Fee | Currently, $25 to $500 for a single default, but may vary based on the severity of defaults, number of defaults, and repetition of defaults. |
| Failure to Comply with Standards or Law Fee | Up to a $5,000 fee plus the franchisor’s reasonable expenses connected with any inspection, examination, or analysis of products or the franchisee’s bakery. |
| Development Deadline Extension Fee | $2,500 per missed deadline. |
| Repeated Inspection Fee | Cost of inspection. |
| Audit | Cost of audit. |
| Reimbursement of Services After Default | All costs and expenses that the franchisor reasonably incurs. |
| Liquidated Damages (Full or Concession Bakery) | The average monthly amount of royalty that the franchisee owed Cinnabon during the past 36 months times the lesser of remainder of the term of the Franchise Agreement or 36 months. |
| Liquidated Damages (Express Bakery) | The average amount the franchisee paid per month to purchase proprietary goods during the past 36 months times the lesser of remainder of the term of the Franchise Agreement or 36 months. |
| Appraiser’s Fee | 50% of appraiser’s fee. |
| Indemnification of Cinnabon | The franchisor’s cost. |
| Attorneys’ Fees | The franchisor’s cost. |
| Reinstatement Fee | 10% of the amount of the then-current initial franchise fee, plus royalty fees that would have been payable in period between termination and reinstatement. |
| De-identification Fee | The franchisor’s actual costs, plus interest and an administrative fee equal to 15% of the franchisor’s actual costs. |
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