How Much Does it Really Cost to Open a Cinnabon Franchise? (2022)
Cinnabon franchise owners thrive in the food service sector and enjoy giving back to their community. Cinnabon is providing Franchise Partners the opportunity to be a part of a globally recognized brand. But first, you must determine the cost of opening a Cinnabon franchise.
About Cinnabon
Cinnabon is a bakery chain in the United States with both stores and kiosks.
As of December 2017, they had over 1,200 stores in 48 countries.
939 were in the United States, with only one company-owned location.
The same corporation as Auntie Anne’s owns it.
Their cinnamon rolls and specialty-blended beverages are their trademark offerings.
Their goal is to be a global player in the snack industry as well as the finest bakery and coffee shop franchise.
Cinnabon has been serving delectable treats for over 25 years.
They are looking for franchise partners who are enthusiastic about owning their own Cinnabon Bakery franchise.
They hope that the franchisees will continue the expansion and create lasting memories for their patrons.
Cost of Cinnabon’s Franchise
Cinnabon’s initial franchise fee is $30,500.
When you open a Cinnabon franchise, you must pay this upfront fee.
The total assets required to start a Cinnabon Franchise range from $233,700 to $546,800.
The following expenses are included in the upfront outlay for a Cinnabon location.
Many of these are one-time fees required to start the franchise.
To open a Cinnabon franchise, you’ll need at least $120,000 in liquid capital and a $300,000 net worth.
The royalty fee is 6% of the net sales.
For non-streetside locations, the marketing fee is 1.5% of net sales and 3% of net sales for streetside locations.
These fees are slightly higher than the industry standard, with royalty fees averaging 5.3% of the total amount.
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Cinnabon Franchise Profits
Based on the average sales provided by Cinnabon franchise locations,
It will take approximately 7 years to recoup your investment at a 15% profit margin.
This is a longer term than most franchise opportunities.
However, you might not get a 15% profit margin, which would delay your return on investment.
Include in your computation the duration it takes to expand the business.
It is typically 1.5 years for skilled trades and 2.5 years for food companies.
Many factors influence your Franchised Store’s sales.
Costs, and expenses, including the Franchised Store’s size, geographic location, menu mix, and market competition.
In addition to the existence of other Cinnabon locations.
The level of market penetration and customer loyalty is another reason.
Profits will also be affected by the level of administration and delivery at your Franchised Store.
Is Cinnabon Franchise Worth it?
Let’s use DealStats estimates to assign an asset value multiple to Cinnabon franchises.
They calculated the estimated Selling Price as Net Sales – 0.44.
Cinnabon franchises will sell for $261,981 based on a mean average multiple of 0.44.
In addition to net earnings of $595,413 in 2021.
This is less than the $390,250 midpoint investment.
However, the initial investment is recoverable.
The more companies you own, the more increased income prospects you have.
Private equity investors become keen on your company rather than individual owner-operators.
As a result, Cinnabon is a very profitable business for the franchisor.
With $174 million in retained earnings in 2021.
They increased by 8.75% from 2019 to 2021, compared to $160 million in 2019.
This is an obvious sign of the company‘s rapid growth.
The company has grown, albeit slowly, over the last three years.
Only 15 new Cinnabon locations opened between 2019 and 2021.
That works out to 5 stores per year on average.
This may indicate market dominance when compared to their total of 939 outlets.
Cinnabon Franchise Offers
Development of Real Estate and Stores
Design mockups and abstract floorplans for new Pastry shop franchises.
Complete real estate services.
Including a devoted renting team that will proactively identify new real estate opportunities.
They will also lead LOI propositions, lease agreements, and rental evaluations.
Training
Thorough licensed training in both the field and at Cinnabon’s WOW University for Franchise Partners and top personnel.
Ongoing corporate and on-site Bakery franchise training.
Online training techniques and advancement assistance are available.
Comprehensive Bakery and Coffee Shop Franchise Services Handbook
Field Support and Operations
Effective administration coaching and trips to the bakery
Access to the company’s top management for business and productivity reviews.
Quality, service, and hygiene examinations.
Rebranding
Bakery and coffee shop franchise marketing strategies that are creative and focused.
Sales counter, product placement, and local store advertising materials of the best standard.
Advertising and public relations staff dedicated to assisting with media and promotional planning.
Promotion for seasonal and local store marketing.
Distinct, personalized publicity and branding materials will be provided by an in-house design firm to Franchise Partners.
Product Creation
A wide range of delectable menu options is available.
Consistent checking, process innovations, and expansive creations result in world-class menu variation.
Quality improvement and support personnel.
Ongoing Assistance
Cinnabon Franchise Business Consultants make regular consultation visits.
Meetings with regular Q&A sessions.
A business survey of sales volumes and performance in comparison to system-wide standards.
Internal web with an encryption key.
Final Words
In summary, Cinnabon Franchise is a wise investment.
It has a huge profit and is a lucrative business venture.
You must be committed to giving outstanding fine dining service to your neighborhood.
This is in addition to meeting their cash obligations.
Contact them because this could be the business for you.
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