If you want to own small bakery with a globally recognized brand behind it, Cinnabon might be the right franchise opportunity. They have over 880 stores across the United States and a footprint internationally. Cinnabon has been in business for more than 3 decades.
How much does it cost to open a Cinnabon?
Cinnabon is open to franchising with different options. You can choose to franchise a full bakery or an express bakery. To apply for one this franchise in the United States, you’ll need to meet their financial qualifications which are having a liquid capital of $120,000 and a minimum net worth of $300,000.
The total investment for a Cinnabon franchise is expected to be $232,700 to $475,700 for a full bakery while you can expect to invest $61,100 to $158,350 for an Express Bakery. An Express Bakery is a smaller location with a limited menu. Usually these Express Bakery’s are located inside other businesses like gas stations, another restaurant, or a cafeteria. The initial franchise fee for a full bakery is $30,500 while an Express Bakery retail space is $8,000.
See Also : Checkers Franchise In USA
In this franchise review, I walk you through the financial details of this famous cinnamon roll brand. Below is a guideline of what you can expect when you franchise Cinnabon, what the advantages and challenges are in operating a branch, how much does Cinnabon makes yearly, and the other alternative bakeries.
Financial Requirements and Fees
The following details below are Cinnabon’s financial requirements and fees to operate one of their branches in the United States:
|Net Worth||$300,000 (minimum)|
|Total Investment||$232,700 – $475,700 (full bakery)|
$61,100 – $158,350 (express bakery)
|Franchise Fee||$30,500 (full bakery)|
$8,000 (express bakery)
To explain in detail, full bakeries are stores that sell Cinnabon’s full list of products. Express bakeries on the other hand are stores that sell limited Cinnabon products and are located together with another restaurant, business, or food service facility.
Cinnabon also has additional ongoing fees such as a royalty fee of 6% and an advertising fee of 1.5% to 3%. Both depend on the net sales and are applicable for full bakeries.
Average Sales / Revenue per Year
See Also: Chipotle Franchise
Cinnabon’s sales in 2020 were $143 million which was a decline in revenue from their $201 million sales in 2019. Of course, the government lock-downs and a health crisis were to blame for the sales decline. Cinnabon in particular was exposed to this global crisis with many locations operating in shopping malls.
But despite this, Cinnabon continues to grow and expand. They’re continuing to release new products and they’ve recently opened another location in Leeds, UK. Though there aren’t any recent numbers regarding their revenue this year, I eagerly await the changes when the annual reports come out.
Cinnabon Franchise Facts
|Total Units||1,100 worldwide (880 in the United States)|
|Incorporated Name||Cinnabon LLC|
|Subsector||Food and Beverage|
Cinnabon was founded in Seattle in 1985 by a father and son duo. Rich and Greg Komen then enlisted the help of Jerilyn Brusseau to produce the “World Famous Cinnamon Rolls”. Their first bakery was in Sea Tac Mall, Seattle where they introduced to the public what we all know now as Cinnabon’s Classic Roll.
Their first franchise was in Philadelphia and it happened a year later. To this date, Cinnabon has over 1,100 branches worldwide with 880 of it in the United States. Texas has the highest number of Cinnabon branches with the count already with nearly 200 locations.
Cinnabon is known for its cinnamon rolls with different varieties. They have the classic cinnamon roll which they sell in a regular size and a mini version. But there are many more flavors like Caramel PecanBon, CinnaSweeties which are bite-sized doughnut balls, Cinnabon Stix, and Churro Swirl.
See Also: Khadims Franchise
Cinnabon uses their registered Makara Cinnamon from Indonesia which is responsible for that sweet-smelling and enticing aroma you always get a whiff of when you pass by one of their stores. The brand uses 240,300 pounds of icing per year.Aside from baked goods, Cinnabon also serves drinks such as coffee, lemonades, and their famous MochaLatta Chill. Cinnabon also sells branded products at the grocery store such as their rolls and pastries all boxed up for you to reheat and make at home.
Cinnabon is also available as a flavor offered by other big brands. For instance, there is a Cinnabon flavored ice cream from Breyers, Cinnabon snacks by Kellogs, Cinnabon flavored nutritional drink by Carnation Breakfast Essentials, Cinnabon pods for Keurig, and a Cinnabon creamer by International Delight. I’ve enjoyed their branded creamer in my coffee at home more than once.
The company that owns Cinnabon is Focus Brands, Inc. This company also owns Auntie Anne’s, Jamba Juice, Carvel Ice Cream, Moe’s Southwest Grill, McAlister’s Deli, and Schlotzky’s which is why you can see some Cinnabon products in some of these stores’ menus. For example, McAlister’s Deli offers a Cinnabon Mini Cookie Sandwich on the menu.
Oftentimes, you’ll also see a Cinnabon and an Auntie Anne’s or a Schlotzky’s sharing one retail space. This is what Cinnabon calls a co-brand store or a co-brand kiosk bakery which the company also offers as franchise option. If you open up an Express Bakery at a new Schlotzky’s restaurant, the initial franchise fee is $8,000 and the investment would be around $23,600 to $44,000. Cinnabon’s headquarters is located in Atlanta, Georgia.
How Much Does Cinnabon Make in Profit?
As mentioned above, Cinnabon earned $143 million in gross revenue in 2020. Though there is no actual data that shows how much a Cinnabon makes in profit, you can judge with the way they keep on expanding to know how the business is faring.
See Also: Mr. Sandwich Franchise
One thing to keep in mind is that different concepts offered by Cinnabon corporate will yield different annual sales numbers and expenses. For example, a Cinnabon Full Bakery will cost more to invest in since you need a dedicated retail space, but you should also anticipate a higher-volume of sales. An Express Bakery on the other hand will cost less money to get started, but probably won’t generate as many sales due in part to a smaller menu and less lower output potential.
Here are a few things to consider from a business perspective before investing in this or any franchise opportunity:
- Profit Margin: Cinnabon should be a high-profit concept considering they sell baked goods. Often baked goods can be sold at a 40% profit margin.
- Average Ticket Value: The bigger the average ticket, the more potential revenue and profit you’ll bring in each month. The majority of Cinnabon items run under $5 each so you’ll need to. When possible you’ll want to encourage customers to purchase a 12-pack of baked goods to share with their family and friends to boost these average ticket values. Another option is to promote high-margin coffee with each customer transaction.
- Will you be operating the business? This is a really important consideration before moving forward. If you plan to manage a Cinnabon store yourself and work in the business day-to-day, you will be able to save yourself $50,000 – $90,000 a year in salary. Instead of paying a manager, this salary will drop to your families bottom line.
- What’s your break even? After determining the profit margin, average ticket value, and whether or not you’ll be operating the business yourself, you can determine an estimated break even point for the business. In other words, how many MiniBons and rolls will you need to sell ever year to break even. Make sure to conduct your own analysis to make sure the numbers make sense.
Cinnabon is also ranked number 35 in Entrepreneur’s 2021 Franchise 500 Rank. The company has continued to climb in these rankings since 2017.
Advantages of a Cinnabon Franchise
There are a number of pros when you own a Cinnabon franchise. Here are a few important advantages you can expect.
See Also: Jail Chai Bar Franchise
Cinnabon states on their website that franchise experienced is not required when applying to operate one of their branches. But having no experience can be worrisome too since you may not operate the business correctly. Well, have no fear because Cinnabon will give you hands-on franchise training. This training will come with an evaluation and a recommendation so you understand how to manage a Cinnabon franchise. Here are the educational programs that Cinnabon provides:
- Bakery Manager Training Program – 6 days of training
- Grand Opening Support – A designated person from the training department will help you with the bakery’s opening. They’ll also do a follow-up visit afterward.
- Job aid manuals, crew training manuals, and promotional items will be given to the bakery franchise.
- You’ll also be visited regularly by their Franchise Business Consultant.
Cinnabon doesn’t restrict you to one option when franchising their bakery. You can choose whether to operate a full one or a kiosk and get in at a variety of investment ranges. You can also choose to partner other brands. This helps if your budget cannot fit the requirements of a full bakery so you can still choose to do an express one.
Cinnabon is known worldwide and continues to expand to this day. You can find them everywhere especially in malls and airports. With a big name like this, you won’t need to worry as much about introducing the products of Cinnabon to the local market.
Challenges of a Cinnabon Franchise
See Also: The Burger Nation Franchise
A franchise is still a form of business and it poses its own set of challenges. What we have below is a list of what challenges to expect so they don’t take you by surprise.
If you take a good look at Cinnabon’s menu, you’ll notice that they only have 2 to 3 flavors of cinnamon rolls. That’s it. They don’t serve anything else. For others who are looking for a bakery that sells plain rolls or savory breads, you won’t find it at a Cinnabon. This store is truly for cinnamon lovers only.
Does Not Offer Direct Financing
Some franchises will offer financing as a means to help businessmen to franchise their stores. This means if you lack capital or other financial aids, the franchise will help you. Cinnabon has stated that they do not offer financing but they can refer you to a 3rd party vendor instead.
With a limited menu and a bakery size that’s small, you can expect that the profit might not be big as you expect it to be. Though the name Cinnabon is known worldwide, the size of the bakery and the products they release are not that much. You can expect sales but not the certain numbers you’re after.
Finally, you can get Cinnabon branded products pretty much anywhere you shop. You can find the product in grocery stores, gas stations, airports, and shopping malls. This is wonderful for corporate managers, but not always great as a franchisee if consumers can find these products literally anywhere. Make sure you open in a market that’s not overly saturated with Cinnabon products.
Is the Cinnabon Franchise Right For You?
If a small simple to operate bakery is what you’re after, then Cinnabon could be right for you. It’s a no-frills kind of franchise with a limited food and beverage menu. It also has a big name already and they offer training programs for you when you start. You can also run this with minimal staff, especially if it’s an express kiosk.
However, if you’re looking for a bakery with an extensive menu, you might want to forego a Cinnabon and look for other options.
What is an alternative bakery franchise?
Some bakery franchises you might want to look into are Corner Bakery or Krispy Kreme.
Corner Bakery offers baked goods such as brownies, cookies, bars, and cake slices. They also offer sandwiches, soups, pastas, salads, and wraps. This has a bigger menu than Cinnabon so you can have more options to offer to your customers. You can expect your initial investment to be around $952,000 to $1,952,000.
Krispy Kreme is also another alternative. This store focuses more on doughnuts and offers different flavors of them on their menu. The franchise fee is $25,000 and the investment is around $275,000 to $1,911,250.
Everyone has probably had one or a dozen cinnamon rolls from Cinnabon. If you haven’t, then it’s easy to just drive by one of their stores and grab such a treat because they’re everywhere. Give them a try as a customer first to see if you like the concept. You can find these locations in pit stops, airports, and malls.
With all these tips and guidelines, you’ll be smarter about opening your very own Cinnabon.