If you are looking towards opening a Cinnabon Franchise, you need 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. This and more are what you will get from this article.
Cinnabon Franchisor SPV LLC was founded in 1985. They began franchising in 1986 and they have their corporate headquarters in Atlanta, Georgia, USA. Cinnabon Franchisor SPV LLC is a wholly-owned subsidiary of FOCUS Brands Systems LLC.
Moms with children and shopping bags, tourists with baggage, and anybody else looking for a treat can find balance at Cinnabon. Their mission is to be a global player in the snack business and a best-in-class bakery and coffee shop franchise, with more than 1,200 bakeries providing baked goods and specialty-blended beverages in more than 56 countries.
Step By Step Process on How to Apply for Cinnabon Franchise
If you want to start a Cinnabon franchise, these are the step-by-step process you should follow:
1. You Must Make Sure You Have Enough Start-up Capital
The first step when it comes to starting a Cinnabon franchise is to make sure you have enough start-up capital. This is so because starting a Cinnabon franchise doesn’t come cheap, especially for fresh entrepreneurs or investors. The least liquid cash you must have before you can start negotiating for Cinnabon is $120,000.
2. You Must Make Sure You Have Enough Experience
Starting a Cinnabon franchise can be demanding and as such before you acquire the franchise, you must make sure you have the required experience in the industry or in related business.
3. Evaluate Market Availability
Before applying for a Cinnamon franchise, you must make sure there is any opening in your city or location you intend to open the franchise.
No doubt, Cinnamon franchise is a global brand and the company has an active presence all across the globe, but they only sell their franchise based on the opportunities that are available in a city. This is why this step is necessary before sending in your application.
4. Submit Your Application
Lastly, if you are certain that you met all their requirements, then the next step to take is to visit their website and fill out their franchise application form. Once they receive your application, the team responsible for reviewing the application will contact you and then give further instructions on how you can successfully become a franchisee under the Cinnabon brand.
Cinnabon Franchise Cost
You must have a minimum of $120,000 in liquid assets and a $300,000 net worth in order to open a Cinnabon franchise. You’ll also have to pay a $30,000 franchise fee. A Cinnabon franchise normally requires a total startup cost of between $185,150 and $330,700.
- Liquid Cash Requirements: from $120,000+
- Initial Investment: $185,150 to $330,700
- Initial Franchise Fee: $30,000
Cinnabon Franchise Fee
The monthly Cinnabon franchise fee equals 6% of revenue sales. The cost of the many services and assistance that Cinnabon offers its franchisees is partially covered by this fee. Then there is a monthly cost of an extra 1.5% for advertising and promotion.
- Ongoing Royalty Fee: 6%
- Ad Royalty Fee: 1,5%
Here is a breakdown of the cost of opening a Cinnamon franchise;
Initial Franchise Fee: $30,500
Construction and Build Out Costs: $97,000 to $224,000
This budget comprises the costs associated with hiring a general contractor to outfit the Bakery in accordance with franchisor standards. The following are just a few examples of leasehold improvements: HVAC, electrical, woodwork, flooring, and painting.
Costs could be much higher than these estimates in some major metropolitan areas, including Washington, D.C., Boston, Seattle, Chicago, Los Angeles, New York, and San Francisco because of regional market rates for labor and materials.
This estimate excludes leasehold improvements for newly constructed standalone structures or newly constructed standalone structures with drive-throughs because the costs for these formats can differ greatly.
Allowances from your landlord for tenant improvements can be negotiable. The projected tenant improvement allowances are not included in the calculation.
Permitting: $500 to $1,000
Please note that this estimate accounts for all fees associated with obtaining building permits. The expenses of the necessary permissions may, in some areas, be significantly higher than the franchisor’s projections.
Equipment Package: $25,000 to $94,000
Please note that some machinery and equipment (such as kitchen equipment) that adhere to the franchisor’s standards must be purchased or leased from an Approved Supplier. Please note that these prices do not include the cost of any owned, leased, or hired, delivery motor vehicles that you would utilize for Bakery operations.
If you want to provide delivery and catering services, you might need to buy at least one branded catering vehicle that is outfitted in accordance with the franchisor’s specifications. This vehicle will cost between $25,000 and $35,000 if you buy it, or between $500 and $700 per month if you lease it, though the price of the lease may vary greatly.
Millwork: $20,000 to $36,000
Please note that you will have to pay for millwork at the Bakery, which can entail paying for and setting up cabinets and countertops.
Please note that you need to buy office furniture, tables, and chairs from an Approved Supplier in order to comply with the franchisor’s Standards.
Menu Board, Graphics, and Interior Signage: $3,900 to $12,000
Please note that this estimation includes the cost of interior signage and of course digital and/or static menu boards.
Exterior Signage: $2,500 to $7,500
Your outdoor sign’s price will vary based on the size, color, quantity, and lighted channel letters of the sign, as well as any other requirements set forth by the franchisor.
Computer System: $6,000 to $24,000
You are required to purchase, lease, or obtain a license for the POS System, computer systems, mobile hardware, software, online ordering platform, associated computer hardware, telephone lines, network connections, communications equipment, high-speed internet access (such as DSL or cable), credit card,
Loyalty card, and gift card, processing equipment, as well as other equipment that the franchisor may occasionally require (collectively, the “Computer System”) and install it at the Bakery. Additionally, you can be compelled to buy training software from a supplier the franchisor specifies.
Smallwares: $2,500 to $5,000
This budget for this comprises the price of buying the tools and equipment required to run the Bakery, such as cleaning supplies, and smallware.
Architect/Engineer: $6,500 to $12,000
Please note that it is mandatory to hire the services of licensed engineers and architects (for electrical, mechanical, structural, and plumbing) to draft standard construction plans for your Bakery.
Rent: $4,000 to $10,000
Only one month’s rent is included in the amounts above, which represent the franchisor’s estimates for leasing the Bakery location.
A Full Bakery’s typical location is along a busy street or a shopping center. A Full Bakery in-line site normally has 12 seats and 3 to 6 tables, and it is between 650 and 900 square feet in size. The normal size of a Full Bakery kiosk site is between 250 and 400 square feet, with no seating.
Current market rents may be much higher than the high estimate in some major metropolitan areas, including Washington, D.C., Boston, Seattle, Chicago, Los Angeles, New York, and San Francisco, as well as in some other high-demand neighborhoods.
Grand Opening Marketing: $3,000 to $5,000
When your bakery first opens, you must run a grand opening advertising campaign. The complete cost of any price discounts or other customer incentives, as well as media and promotional costs, are solely your responsibility during the grand opening.
For a full bakery, you must spend a minimum of $3,000 on an advertising campaign for the grand opening. The minimum grand opening advertising obligation may be waived or reduced by the franchisor at any time.
Legal and Accounting Fees: $5,000 to $10,000
This estimate takes into account any expenses for accounting and law that you might pay while starting your business. These costs could consist of the cost of hiring lawyers and accountants that you will need to analyze the Disclosure Document and any associated agreements, as well as the costs of entity creation and lease negotiations.
Insurance: $2,000 to $5,000
For the duration of the term of your franchise agreement, you are responsible for obtaining and maintaining a full business insurance program, including property, commercial general liability, automobile liability, business property, umbrella, workers’ compensation, employment practices liability, cyber liability, and (if you serve alcohol) dram shop liability insurance.
Based on the minimum standards set forth by the franchisor, these numbers provide an estimate of the cost of your insurance premiums for the first year of operation.
Miscellaneous Opening Costs/Office Supplies: $1,800 to $6,800
Please note that this covers the cost of office supplies as well as various startup charges, such as power bills, business licenses and permits, opening help, and employee training fees.
Security Deposits: $0 to $15,000
This estimate takes into account the price of utility service activation deposits, such as those for starting telephone, gas, electricity, water, and other services. Generally speaking, depending on the provider’s policies, these deposits are refundable. No security deposit under any lease for the Bakery is included in this estimate.
Training and Support Fees: $0 to $3,500
You must pay the On-Site Training and Assistance Fee (currently $500 per day per trainer plus trainers’ travel and living expenses) if Cinnabon asks for it or if you decide to get it for your third or additional Bakeries (including Bakeries owned by your affiliates).
The high estimate takes into account the expense of sending one of Cinnabon’s trainers to Full Bakeries for a week of such on-site instruction and support.
Travel and Living Expenses During Training: $3,500 to $7,500
The cost of two people attending the management training program in Atlanta, Georgia, is estimated in this figure. You are in charge of paying for all of your trainees’ program-related costs, including their compensation, living expenses, and travel.
Opening Inventory: $5,000 to $8,000
Based on the size, location, and anticipated sales of your Bakery, the cost of your starting inventory of food and paper goods will vary. According to the franchisor, the range provided will be adequate to cover a supply of food and paper goods for the Bakery’s activities for one to two weeks. This product also comes with a marketing opening kit for Full Bakeries.
Additional Funds for 3 Months: $15,000 to $30,000
This includes how much extra money you will need before your bakery begins and during its first three months. These costs may include; rent, bank fees, state tax and license fees, deposits, employee salaries, wages, and benefits, payroll taxes (including payroll to cover the pre-opening training period for your staff), royalties, advertising donations, increased advertising costs, additional inventory, other supplies and equipment, and advertising contributions, prepaid expenses, and other ad-hoc costs.
Total Initial Investment: $233,700 to $546,800
For a Full Bakery Located in a Non-Traditional Location
A Cinnabon Full Bakery located in a non-traditional location will require a total estimated initial expenditure of between $125,500 and $423,100 to open.
For an Express Bakery (Excluding Bakeries in New Schlotzsky’s Restaurants)
With the exception of the bakeries in the new Schlotzsky’s restaurants, the projected total initial investment required to open a Cinnabon Express Bakery is between $61,100 and $159,850.
For an Express Bakery in a New Schlotzsky’s Restaurant
Between $23,600 and $45,500 is the projected total initial investment needed to open a Cinnabon Express Bakery in a new Schlotzsky restaurant.
For a Concession Bakery – Food Truck
A Cinnabon Concession Bakery – Food Truck is expected to require an initial expenditure of between $152,000 and $248,500 to get up and running.
For a Concession Bakery – Trailer
The total projected initial investment necessary to start a Cinnabon Concession Bakery – Trailer ranges from $112,000 to $228,500.
Cinnabon Franchise Requirements
Here are some of the basic requirements you are expected to meet before you can open your own Cinnabon franchise:
You must have the required business experience and business exposure that is required to operate a Cinnabon franchise.
You must have a good and workable business plan in place before you can qualify to open a Cinnabon franchise in your city.
Good Credit History
You must have a good credit rating and history before you can qualify to open a Cinnabon franchise.
Minimum Cash Requirement
You must have liquid cash of at least $120,000 at the time of applying for the Cinnabon franchise.