Cinnabon Franchise FDD, Profits, Costs & Fees (2024)
Cinnabon is famous worldwide for its sweet cinnamon rolls. It was founded on December 4, 1985, in Seattle, Washington. The franchise quickly grew, starting to expand in 1986. Today, Cinnabon has over 55 locations in countries around the world.
Headquartered in Atlanta, Georgia, Cinnabon operates under Focus Brands. Its product range includes classic rolls, mini rolls, and various flavored beverages.
Cinnabon is known for creating a sensory experience with its delicious aroma. The smell of cinnamon and freshly baked goods draws customers to the bakery, making the brand even more irresistible.
Cinnabon Franchise Stats
Cinnabon
Number of units: 952 franchises
Initial investment: $26,000 - $1,032,000
Average revenue (AUV): $502,000
Initial Investment
How much does it cost to start a Cinnabon franchise? It costs on average between $26,000 – $1,032,000 to start a Cinnabon franchised restaurant.
This includes costs for construction, equipment, inventory, and initial operating expenses. The exact amount depends on various factors, including the type of restaurant you choose, the location, and whether the franchisee chooses to lease or purchase the property. Cinnabon offers 7 types of franchises:
| Type of Location | Initial Investment Range |
|---|---|
| Traditional Location | $254,750 to $674,400 |
| Non-Traditional Location | $235,600 to $611,400 |
| Express Bakery in a new Schlotzsky’s® | $26,270 to $59,520 |
| Express Bakery in any other location | $66,020 to $179,800 |
| Concession Bakery | $114,250 to $299,995 |
| Auntie Anne’s Co-Branded Bakery | $441,475 to $990,400 |
| Carvel Co-Branded Bakery or a Swirl Bakery | $428,750 to $1,031,500 |
We are summarizing below the main costs associated with opening a Cinnabon Traditional Locationfranchised restaurant. For more information on the costs required to start a Cinnabon franchise, refer to the Franchise Disclosure Document (Item 7).
| Type of Expenditure | Traditional Low Amount | Traditional High Amount |
|---|---|---|
| Initial Franchise Fee | $30,500 | $30,500 |
| Construction and Build Out Costs | $99,800 | $297,000 |
| Permitting | $2,400 | $7,900 |
| Equipment Package | $45,000 | $108,000 |
| Millwork | $20,000 | $40,000 |
| Menu Board, Graphics and Interior Signage | $2,000 | $12,000 |
| Exterior Signage | $2,300 | $15,000 |
| Computer System | $7,400 | $27,400 |
| Smallwares | $3,500 | $7,000 |
| Architect/Engineer | $4,200 | $18,800 |
| Rent | $4,000 | $10,000 |
| Grand Opening Marketing | $2,500 | $7,500 |
| Legal and Accounting Fees | $5,000 | $10,000 |
| Insurance | $1,250 | $6,800 |
| Misc. Opening Costs/Office Supplies | $1,800 | $6,800 |
| Security Deposits | $0 | $15,000 |
| Management Training Program Fee | $0 | $2,500 |
| Travel and Living Expenses during Training | $3,100 | $5,100 |
| On-Site Training Fee | $0 | $6,100 |
| Opening Inventory | $5,000 | $8,000 |
| Additional Funds – 3 Months | $15,000 | $33,000 |
| Total Initial Investment | $254,750 | $674,400 |
Average Revenue (AUV)
How much revenue can you make with a Cinnabon franchise? A Cinnabon franchised bakery makes on average $502,000 in revenue (AUV) per year.
Here is the extract from the Franchise Disclosure Document:
This compares to $788,000 yearly revenue for similar baked goods franchises. Below are 10 Cinnabon competitors as a comparison:
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Cinnabon Franchise Disclosure Document
Recent Legal Disputes and Litigation
Cinnabon has been involved in significant legal disputes, including a prominent class action lawsuit related to anti-poaching agreements. This lawsuit, initiated in 2018, accused Cinnabon’s franchise agreements of violating the Sherman Antitrust Act and various state-level business practices laws.
The lawsuit argued that anti-poaching clauses prevented franchisees from hiring employees from other Cinnabon locations, limiting labor mobility and potentially suppressing wages across franchise locations.
The case, Yi v. SK Bakeries, LLC, centered around the Western District of Washington, where the plaintiffs, former employees, argued that such clauses were inherently anti-competitive and should be deemed unlawful.
The court rejected the plaintiffs’ argument that the case was a clear violation of antitrust laws under a per se theory, which would automatically render the clauses illegal. However, the court allowed the case to proceed using a quick-look analysis, which examines the potential for competitive harm without a full-scale economic analysis.
This case is particularly significant because it follows a broader trend in franchising, where anti-poaching agreements are increasingly scrutinized under antitrust laws. As of 2023, the litigation remains ongoing, with the potential to impact how franchise agreements are structured across the industry.
Frequently Asked Questions
How many Cinnabon locations are there?
As of the latest data, Cinnabon operates over 1,880 locations worldwide. The vast majority of these are franchised units, while a smaller number are company-owned. The exact breakdown shows that Cinnabon primarily operates through franchised units, leveraging its strong brand to attract franchisees across different formats, including mall-based locations, travel centers, and co-branded outlets.
What is the total investment required to open a Cinnabon franchise?
The total investment required to open a Cinnabon franchise ranges from $26,000 to $1,032,000.
What are the ongoing fees for a Cinnabon franchise?
Cinnabon franchisees are required to pay a royalty fee of 6% of gross sales, which is a common rate among franchises to ensure the franchisor receives compensation for the use of its brand, systems, and support services.
Additionally, franchisees must contribute to marketing and advertising fees, which are typically 4% of gross sales. These fees go toward national and regional marketing efforts to promote the Cinnabon brand and help drive traffic to all locations. This structure ensures that franchisees benefit from consistent brand visibility and marketing initiatives.
What are the financial requirements to become a Cinnabon franchisee?
To become a Cinnabon franchisee, you must have a minimum net worth required is typically around $400,000.
Additionally, potential franchisees must have at least $120,000 in liquid capital available. These financial thresholds are designed to ensure that franchisees have the ability to cover initial startup costs, ongoing operational expenses, and any unexpected financial challenges that may arise during the operation of the business.
How much can a Cinnabon franchise owner expect to earn?
The average gross sales for a Cinnabon franchise are approximately $0.5 million per location. Assuming a 15% operating profit margin, $0.5 million yearly revenue can result in $75,300 EBITDA annually.
Who owns Cinnabon?
Cinnabon is owned by Focus Brands, a prominent American company that manages several well-known food franchise brands. Focus Brands is a subsidiary of Roark Capital Group, a private equity firm.
Focus Brands oversees multiple franchise chains, including Cinnabon, Auntie Anne’s, Carvel, and Jamba, making it a key player in the global franchising and food service industry. Cinnabon has been part of the Focus Brands portfolio since 2004.
Disclaimer
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