FDD Talk 2014: Our Latest Views on Cinnabon’s Average Net Sales, Expenses, and Net Operating Income

Highlights of Cinnabon’s Item 19 Financial Performance Representations (2014 FDD) – Part 2

Explanatory Notes for Table 3 – Average Net Sales and Net Operating Income as a Percentage of Average Net Sales for 2013 Fiscal Year (Enclosed Malls System-Wide, All Regions)

• As of December 29, 2013, there were a total of 216 Cinnabon locations operating within enclosed malls. Of those 216 locations, 161 operated under the same ownership and were open for business from December 31, 2012 through December 29, 2013. This table does not include 55 enclosed mall locations which were neither under the same ownership nor open for the entire 2013 fiscal year.

• Of those 161 locations, 91 (representing 56.52% of the 161) are included within the information contained in Table 3.

• Cinnabon has not included information in Tables 3 through 7 if:  (i) the franchise was not in operation for the entire 2013 fiscal year; (ii) the ownership of the franchised location changed during the 2013 fiscal year; or (iii) the franchisee submitted late, incomplete, or illegible financial information or submitted such information in an unacceptable format.

• Rent includes the base rent for your lease including extra charges, such as common area maintenance (CAM) charges, real estate taxes, percentage rents, etc. Your actual rent as a percentage of sales may vary considerably from the estimates shown, depending on many factors, including the size of the premises, the site’s condition, its location, demand for the site, and the requirements of individual landlords.

• Rent as a percentage of sales ranged from 5.96% to 41.60% from the financial information included in Table 3.

Explanatory Notes for Table 4 – Average Net Sales and Net Operating Income as a Percentage of Average Net Sales for 2013 Fiscal Year (Enclosed Malls, Northeast Region)

• As of December 29, 2013, there were a total of 49 Cinnabon locations operating within enclosed malls in the Northeast Region. Of those 49 locations, 36 operated under the same ownership and were open for business from December 31, 2012 through December 29, 2013. This table does not include 13 enclosed mall locations which were neither under the same ownership nor open for the entire 2013 fiscal year.

• Of those 36 locations, 12 (representing 33.33% of the 36) are included within the information contained in Table 4.

• Rent as a percentage of sales ranged from 13.19% to 40.33% from the financial information included in Table 4.

Explanatory Notes for Table 5 – Average Net Sales and Net Operating Income as a Percentage of Average Net Sales for 2013 Fiscal Year (Enclosed Malls, Southeast Region)

• As of December 29, 2013, there were a total of 41 Cinnabon locations operating within enclosed malls in the Southeast Region. Of those 41 locations, 31 operated under the same ownership and were open for business from December 31, 2012 through December 29, 2013. This table does not include 10 enclosed mall locations which were neither under the same ownership nor open for the entire 2013 fiscal year.

• Of those 31 locations, 13 (representing 41.94% of the 31) are included within the information contained in Table 5.

• Rent as a percentage of sales ranged from 11.86% to 25.42% from the financial information included in Table 5.

Explanatory Notes for Table 6 – Average Net Sales and Net Operating Income as a Percentage of Average Net Sales for 2013 Fiscal Year (Enclosed Malls, Midwest Region)

• As of December 29, 2013, there were a total of 43 Cinnabon locations operating within enclosed malls in the Midwest Region. Of those 43 locations, 40 operated under the same ownership and were open for business from December 31, 2012 through December 29, 2013. This table does not include 3 enclosed mall locations which were neither under the same ownership nor open for the entire 2013 fiscal year.

• Of those 40 locations, 21 (representing 52.50% of the 40) are included within the information contained in Table 6.

• Rent as a percentage of sales ranged from 6.17% to 41.60% from the financial information included in Table 6.

Explanatory Notes for Table 7 – Average Net Sales and Net Operating Income as a Percentage of Average Net Sales for 2013 Fiscal Year (Enclosed Malls, West Region)

• As of December 29, 2013, there were a total of 83 Cinnabon locations operating within enclosed malls in the West Region. Of those 83 locations, 75 operated under the same ownership and were open for business from December 31, 2012 through December 29, 2013. This table does not include 8 enclosed mall locations which were neither under the same ownership nor open for the entire 2013 fiscal year.

• Of those 75 locations, 45 (representing 60.00% of the 75) are included within the information contained in Table 7.

• Rent as a percentage of sales ranged from 5.96% to 34.86% from the financial information included in Table 7.

Table 3 – Average Net Sales and Net Operating Income as a Percentage of Average Net Sales for 2013 Fiscal Year (Enclosed Malls System-Wide, All Regions)