Highlights of Cinnabon’s Item 19 Financial Performance Representations (2014 FDD) – Part 1
- Tables 1 through 7 present net sales or average net sales, average expenses, and average net operating income figures for the fiscal year ended December 29, 2013 for a majority of Cinnabon franchises that operated under the same ownership for the entire year, obtained from reported sales or the unaudited profit and loss statements submitted by Cinnabon franchisees.
- As used throughout the following Tables 1 through 7, the following definitions apply:
- Net Sales – Net Sales includes, without limitation, monies, gift card redemptions, or credit received from the sale of food, beverages, and merchandise, from tangible property of every kind and nature, promotional or otherwise, and for services performed from or at the Bakery, including, without limitation, off-premises services such as catering and delivery.
- Net Sales will not include the initial sales or reloading of gift cards, coupon discounts, the sale of food or merchandise for which refunds have been made in good faith to customers, the discounted portion of employee meals, the sale of equipment used in the operation of the Franchised Business, nor will it include sales, meals, use or excise tax imposed by a governmental authority directly on sales and collected from customers; provided that the amount for the tax is added to the selling price or absorbed therein, and is actually paid by you to a governmental authority.
- Cost of Goods Sold – Cost of Goods Sold (COGS) is a figure which reflects the cost of materials used to produce the products you sell to your customers. It includes the cost of food ingredients (dough, frosting, beverages, etc.), paper products (cups, napkins, bags, straws, etc.) and retail items (Cinnabon cinnamon, etc.).
- Gross Profit – Gross Profit is Net Sales minus Cost of Goods Sold.
- Operating Expenses – Operating Expenses are the day-to-day costs incurred in conducting normal business operations.
- Labor – Labor includes wages paid to your employees and payroll taxes paid for your employees. Labor does not include actual wages and related expenses you pay to yourself.
- Rent – Rent includes the base rent for your lease including extra charges, such as common area maintenance (CAM) charges, real estate taxes, percentage rents, etc.
- Other Expenses – Other expenses include such things as utilities (electric, telephone), royalties, ad fund fees, advertising, insurance (Workers’ Comp, property, casualty, liability, health, etc.), licenses, permits, repairs, uniforms, store supplies, etc.
- Total Expenses – The total of Labor, Rent, and Other Expenses.
- Net Operating Income – Gross Profit minus Total Expenses.
Cinnabon Stores By Region
- Cinnabon includes the following Regions, and their respective states, in the information presented in Tables 1-7:
- Northeast Region: (i) Connecticut; (ii) District of Columbia; (iii) Delaware; (iv) Maryland; (v) New Hampshire; (vi) New Jersey; (vii) New York; (viii) Pennsylvania; (ix) Rhode Island; (x) Virgina; and (xi) West Virginia.
- Southeast Region: (i) Alabama; (ii) Arkansas; (iii) Florida; (iv) Georgia; (v) Louisiana; (vi) Mississippi; (vii) North Carolina; (viii) South Carolina; (ix) Tennessee; and (x) Texas.
- Midwest Region: (i) Iowa; (ii) Illinois; (iii) Indiana; (iv) Kansas; (v) Kentucky; (vi) Michigan; (vii) Minnesota; (viii) Missouri; (ix) North Dakota; (x) Nebraska; (xi) Ohio; (xii) Oklahoma; (xiii) South Dakota; and (ix) Wisconsin.
- Western Region: (i) Alaska; (ii) Arizona; (iii) California; (iv) Colorado; (v) Idaho; (vi) Montana; (vii) New Mexico; (viii) Nevada; (ix) Oregon; (x) Utah; (xi) Washington; and (xii) Wyoming.
Explanatory Notes for Table 1 – Net Sales Range 2013 Fiscal Year (Various Venues Which Are Not Co-Branded With Another Business)
- The Bakeries whose results are reflected in the tables below were in operation continuously throughout Cinnabon’s fiscal year ended December 29, 2013. Results of Bakeries that either opened or closed during this period are not included.
- Approximately 60% of Cinnabon franchises that are not co-branded with another location are located in enclosed malls. Tables 2 through 7 relate only to Cinnabon franchises operated in enclosed malls and do not include franchises operated in convenience stores, travel plazas, airports, military bases, entertainment venues, amusement parks, casinos, train stations, or any other alternative locations.
Explanatory Notes for Table 2 – Net Sales of Franchises in Operation for All 12 Months of 2013 By Sales Range (Enclosed Malls System-Wide)
- As of December 29, 2013, there were 216 enclosed mall Cinnabon locations. Of those, 179, or 82.87%, Cinnabon locations within enclosed malls were open for business from December 31, 2012 through December 29, 2013 and are included within the information contained in Table 2.
- This table does not include 38 enclosed mall locations which were not open for the entire 2013 fiscal year.