If you are looking towards opening a Cindy’s Cinnamon Rolls Franchise, it will be nice for you to have a preview of what the company represents before going ahead to enquire about the total cost of opening the franchise in your location.
Cindy’s Cinnamon Rolls was founded in 1985 and they began franchising in 1986, about 24 years ago. The founder and current CEO of the company is Tom Harris and they have their corporate head office at Atlanta – Georgia, USA. As of 2018, the company owns and operates 1,540 franchises in the United States of America and other countries of the world.
Cindy and Tom Harris were inspired to open their own shop after seeing customers line up to watch warm cinnamon rolls come out of the oven at a bakery. The couple felt making and selling warm cinnamon rolls in a mall would be a hit, so they opened their first Cindy’s Cinnamon Rolls store in Fort Collins, Colorado, in 1985. Customers were drawn to the store by the smell of the baking rolls, and would line up for the warm rolls and coffee.
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 three 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.
Here are areas where you are expected to spend money and the cost associated with it;
Initial Investment Range
$69,000 – $130,500
For Full Bakeries, Express Bakeries and Concession Bakeries, 6.0 percent of net sales.
Please note that “Gross Revenues” include all revenues generated from the provision of any and all services and/or the sale of any and all products and, whether by the franchisee or a third-party provider, that relate to or arise from the Franchised Business. It does not include taxes collected from customers.
Construction and Build Out Costs
$50,000 to $175,000
- Permitting: $500 to $1,000
- Equipment Package: $40,500 to $46,000
- Millwork: $29,000 to $40,000
- Furniture: No specific amount
- Menu Board, Graphics and Interior Signage: $6,250 to $12,700
- Exterior Signage: $2,500 to $6,800
- Computer System and Software Training: $8,000 to $12,600
- Smallwares: $2,500 to $3,500
- Architect and Engineer: $6,500 to $8,500
- Rent: $4,000 to $10,000
- Grand Opening Marketing: $3,000 to $5,000
- Legal and Accounting Fees: $5,000 to $10,000
- Insurance: $2,000 to $5,000
- Misc. Opening Costs and Office Supplies: $1,800 to $6,800
- Security Deposits: $0 to $15,000
- Travel and Living Expenses During Training: $2,500 to $5,000
- Opening Inventory: $5,000 to $8,000
- Additional Funds (3 months): $15,000 to $30,000
- Advertising Contribution: 1.5 percent of net sales but the franchisor may adjust this amount up to 3 percent of net sales.
- Advertising Cooperative Contribution: An amount set by the Advertising Cooperative.
- Local Marketing Obligation: Each calendar quarter, franchisees must spend not less than 1 percent 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.
- EFT NSF Fee: The franchisor’s out-of-pocket costs and an administrative fee.
- Interest: 1.5 percent per month or maximum legal interest rate.
- Reporting Late Fee: $50 per week.
- 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, $50 per hour plus travel and living expenses.
- Additional Support and Consulting Fee: A reasonable fee, currently, $500 per day, plus travel and living expenses.
- Plan Review Fee: $1,000 per set of drawings.
- Conference and Program Fee: A reasonable fee, which will vary by program.
- Training Cancellation Fee: The franchisor’s out of pocket costs.
- Electronic Learning Management System: The then-current fee. Currently, the franchisor estimates the cost will be $150 annually.
- Carvel Product Platform Training Fee: The franchisor may charge a reasonable fee up to $750.
- Relocation Fee: 10 percent of the then-current initial franchise fee.
- Lease Renewal Fee and Extension Assistance Fee: The then-current fee. Currently, $2,000.
- Lease Documentation Fee: $500 per month (or partial month) until delivered.
- SRU Fees: Monthly rental fee, which may be calculated as (i) a flat dollar amount or (ii) a percentage of Net Sales derived from the SRU (currently, 8 percent), up to a maximum dollar amount (currently, $1,600 to $2,500).
- Transfer Fee: 50 percent 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 percent of the then-current initial franchise fee.
- Renewal Fee: 10 percent 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 $25 and $250 per month.
- Back Office and Polling Software Fee: Currently, estimated to be between $100 and $200 per month.
- Credit Card Fees: Equipment costs and set up fees estimated to be up to $1,000 per terminal. Transaction fees estimated to be from 2.5 percent to 5.0 percent of transaction amounts. Other fees may apply depending on the vendor used for credit card processing.
- Master Insurance Policy Fee: Currently not charged; the franchisor does not have an estimate at this time.
- Information Security and Compliance Fees: Amount of fees; estimated to be between $75 and $125 per month.
- Gift Card and Loyalty Program Fees: Amount of fees.
- Purchasing Program Fee: Reasonable membership fees assessed by the purchasing program.
- Supply Chain Fee: Currently $0.17 to $0.27 per case purchased through certain appointed distributors.
- Ordering Support Fee: A reasonable fee, which will vary based on the services provided.
- Development Deadline Extension Fee: $2,500 per missed deadline.
- Non-Compliance Fee: Currently, $25 to $500 for a single violation, 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.
- Repeated Inspection Fee: Cost of inspection.
- Audit: Cost of audit.
- Liquidated Damages (Full 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. If less than 36 months have passed since opening and termination, the amount will be the average amount the franchisee paid per month to purchase Proprietary Goods during the time between opening and termination, 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. If less than 36 months have passed since opening and termination, the amount will be the average amount the franchisee paid per month to purchase Proprietary Goods during the time between opening and termination, times the lesser of remainder of the term of the Franchise Agreement or 36 months.
- Appraiser’s Fee: 50 percent of appraiser’s fee.
- Indemnification of Cinnabon: The franchisor’s cost.
- Attorneys’ Fees: The franchisor’s cost.
- Reinstatement Fee: 10 percent 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 percent of the franchisor’s actual costs.
- Veteran Incentives: This is open for negotiation with the company.
- 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. Cinnabon does participate in the SBA’s Franchise Registry Program, and may modify the Franchise Agreement, if necessary, to comply with SBA requirements for franchisees to participate in certain SBA loan programs.
- Initial Investment: $69,000 – $130,500
- Net-worth Requirement: $150,000
- Liquid Cash Requirement: $25,000
- Ongoing Initial Franchise Fee: $25,000 – $25,000
- Ongoing Royalty Fee: 5 percent