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Franchise Costs: Detailed Estimates of Cinnabon Franchise Costs (2016 FDD)

by Franchise Chatter on April 29, 2014

in Bakery Franchise, Franchise Costs

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This post was updated on July 20, 2016 to reflect information from Cinnabon’s 2016 FDD (Item 7).

Detailed Estimates of Cinnabon Franchise Costs Based on Item 7 (Estimated Initial Investment) of Cinnabon’s 2016 Franchise Disclosure Document

For a Full Bakery

1.  Initial Franchise Fee:  $30,000

2.  Real Estate:  Not Specified

  • The franchisor cannot estimate your initial investment for real estate. The franchisor expects that the most attractive locations for Full Bakeries will be in enclosed retail malls, airports, and travel plazas.
  • The typical location for a Full Bakery is in a high-traffic or retail mall area. Full Bakeries typically range in size from 650 to 900 square feet and have about 12 seats and 3 to 6 tables if possible.
  • Security deposits should not exceed an average of 2 months’ rent on the property.

3.  Leasehold Improvements:  $75,000 to $150,000

  • Costs of leasehold improvements, which include floor covering, wall treatment, ceilings, counters, electrical, plumbing, carpentry and related work, and contractors’ fees and permits, will vary depending on the location and size of the premises and any construction allowances granted by the landlord after negotiations.

4.  Equipment, Fixtures, Furniture, Menu Boards, Graphics:  $40,000 to $85,000

  • This item includes refrigerators, freezers, ovens, proofers, mixers, sinks, display cases, drink dispensers and displays, tables and chairs, a POS System, and signage. The Manuals contain a complete list of the approved equipment that you will need.

5.  Smallwares:  $3,500 to $4,200

6.  Storefront Signage:  $2,000 to $7,000

7.  Point-of-Sale:  $3,100 to $6,200

8.  Drink Dispenser:  $2,600

9.  Architect and Business Licenses:  $7,500 to $11,000

  • Local, municipal, county, and state regulations vary on the licenses and permits that you will need to operate a Bakery. For example, you may need city and county occupational licenses and a city food-handlers’ license. You pay these fees to governmental authorities, when incurred, before opening for business.
  • Professional fees payable to your architect, attorney, and other professionals will vary depending on the location of your Bakery and the complexity of the services requested.

10.  Subtotal:  Capital Investment:  $163,700 to $296,000

11.  Initial Training:  $3,500 to $5,000

  • For the initial training, you will need to arrange transportation, lodging, food, and incidental expenses for you and your designated management employees. You also must pay the salaries and benefits of your designated management employees.

12.  Opening Supplies:  $3,500 to $6,000

  • This item includes smallwares (i.e. pots, pans, spatulas, colanders, and similar items) and your initial inventory of food and paper products.
  • The franchisor estimates that the range given will be sufficient to cover a supply of food and paper products for 1 to 2 weeks of Bakery operations.

13.  Insurance:  $2,000 to $5,000

  • You must obtain and maintain during the term of your Franchise Agreement, at your expense, a comprehensive business insurance program, including property, commercial general liability, automobile liability, business property, umbrella, employment practices liability, and workers’ compensation insurance.
  • It is difficult to estimate the cost of required insurance, since the cost varies widely depending on such factors as the size and location of the Bakery premises, the gross sales actually achieved, the other types of insurance coverage included in the policy, and the value of the items insured.

14.  Utility Deposits:  $350 to $500

  • You may need to provide deposits for utilities. The amount of these deposits and utility costs will vary depending on the location of the Bakery and the practices of the lessor and the utility companies.

15.  Additional Funds (3 months):  $5,000 to $10,000

  • You will need capital to support on-going expenses, such as payroll, uniforms, supplies, initial advertising, and miscellaneous expenses.

16.  Grand Opening Advertising:  $3,000

  • You must spend at least $3,000 for a grand opening advertising program; however, this requirement shall not apply to Express Bakeries in Schlotzsky’s Restaurants.
  • Further, this expenditure will not be required if the Bakery is located in a captive audience location (for example, an airport, sports facility, theme park, etc.)
  • If your Express Bakery is located in a Host Facility other than a Schlotzsky’s Restaurant, the amount will be reduced to $1,000.

17.  Subtotal:  Opening Expenses:  $17,350 to $29,500

18.  Total Initial Investment:  $181,050 to $325,500

  • You may have additional or greater expenses starting your business.

For an Express Bakery

  • The total estimated initial investment necessary to begin operation of a Cinnabon Express Bakery ranges from $34,700 to $94,050.

For an Express Bakery in a New Schlotzsky’s Restaurant

  • The total estimated initial investment necessary to begin operation of a Cinnabon Express Bakery in a new Schlotzsky’s restaurant ranges from $24,564 to $34,984.

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