Cinnabon
Cinnabon offers retail bakery franchises selling cinnamon rolls and related products. Known for its signature cinnamon rolls, Cinnabon operates in the food service and retail franchise industry.
About Cinnabon
Cinnabon, Inc., is an American chain of baked goods stores and kiosks, normally found in areas with high pedestrian traffic, such as malls, airports and rest stops. The company's signature item is the cinnamon roll. As of December 2017, there were more than 1,200 Cinnabon bakeries operating in 48 countries. Its headquarters are in Sandy Springs, Georgia, United States.
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Cinnabon franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation ranges widely depending on the type of bakery. For example, a Full Bakery in a Traditional Location requires an investment between $246,950 and $675,000, while an Express Bakery in a new Schlotzsky's restaurant needs between $29,150 and $66,700. This includes mandatory payments to the franchisor or its affiliates as specified for each type of bakery [p.2].
What is the initial franchise fee?
The initial franchise fee varies based on the type of bakery. For a Full Bakery, it is $30,500; for an Express Bakery, $8,000; and for a Concession Bakery, $5,500. Additionally, for Co-Branded Bakeries, the fee includes both the initial franchise fee paid to the franchisor and a separate fee paid to Auntie Anne's or Carvel. [p.54]
What are the ongoing royalty and advertising fees?
The franchisee must pay ongoing royalty fees as specified in Schedule A [p.165]. Additionally, there are advertising contributions required, with revenues from these funds reflected in the consolidated statements of operations [p.143]. These fees cannot be modified or eliminated by the agreement [p.296].
How long is the initial franchise agreement, and can I renew it?
The duration of the initial franchise agreement isn't specified in these excerpts. Additionally, this isn't specified in the provided excerpts regarding renewal terms; however, there is a mention that the franchisor has the right to refuse renewal without fairly compensating the franchisee under certain conditions [p.6(d)].
Can I sell or transfer my franchise, and what does that require?
To sell or transfer your franchise, especially if it is located in a Host Facility that is also a franchise, you must first transfer the Host Facility in compliance with its franchise agreement [p.258]. For non-Control Transfers, you need to provide advance notice and submit requested information, satisfy specified conditions, sign necessary documents, and pay a 10% transfer fee equal to the current initial franchise fee [p.203]. This isn't specified in the excerpts for Control Transfers or if there's good cause for refusal by the franchisor [p.6].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the franchise agreement if there is good cause, which includes the failure of the franchisee to comply with any lawful provision of the franchise agreement and not curing such failure after being given written notice and a reasonable opportunity (no more than 30 days) to do so. [p.6]
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts.
Do I get an exclusive or protected territory?
No, you do not receive any exclusive or protected territory according to the FDD excerpts provided. The franchise agreement explicitly states that you do not have any protected or exclusive rights under the agreement [p.283, p.273, p.254, p.221, p.263]. Additionally, the franchisor reserves all rights not granted to you, which may include territory exclusivity [p.168].
What training and ongoing support does the franchisor provide?
The franchisor provides management training through the Management Training Program, which can be conducted online or at designated Certified Training Locations. For subsequent Bakeries operated by a franchisee or their affiliates, if certain conditions are met (such as having a Certified Training Manager and operating a Certified Training Bakery), the franchisor may allow the franchisee to provide some portions of this training to Required Trainees in their own locations [p.81, p.78]. Additionally, the franchisor is responsible for providing other support services under the Franchise Agreement, although these can be delegated by GoTo Foods, the management company [p.66, p.11] and [p.58] details some of the additional funds needed to cover various expenses before and during the first three months of operation.
How many franchised outlets are there, and how many have closed or been terminated?
This isn't specified in the excerpts. The provided FDD excerpts do not contain information about the number of franchised outlets that have closed or been terminated.
Does the franchisor share any financial performance or earnings information?
The franchisor may provide financial performance information if there is a reasonable basis for it and it is included in the Disclosure Document [p.100]. However, other than what is specified in Item 19, the franchisor does not make additional representations about future financial performance or past earnings of company-owned or franchised outlets [p.104, p.216].
What am I restricted to selling, and where must I buy supplies?
You are restricted to selling only the Approved Products that the franchisor has approved in writing. This includes menu items, Trademarked Product Lines, and other products and services specified by the franchisor [p.92]. You may have to purchase or lease certain equipment from an Approved Supplier, and some items might be more expensive than those you could buy on your own due to supplier restrictions [p.4, p.54].