This article is based on a video originally recorded on Visa Franchise Youtube Channel.
In early 2009, Shannon and Florian Radke had the idea to start a business that would serve mouth-watering, gourmet, cinnamon rolls. The goal was to introduce a new and exciting experience by offering a variety of different frosting flavors and toppings giving the customer the ability to design their very own gourmet, custom cinnamon roll.
Cinnaholic is not a typical cinnamon roll shop, they are not just 100% vegan they also offer a variety of flavors made with high quality ingredients, which are all dairy, lactose, egg and cholesterol free.
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Cinnaholic Franchise
All of the products are hand-made and baked to order. Each roll takes about 30-45 seconds to be ready to eat.
Cinnaholic Franchise offers cinnamon rolls, brownies cookies, cakes, mini buns, party trays, tea, coffee and bottled beverages. Catering is also available.
In 2010, Shannon and Florian Radke decided to put their passions to work, combining Shannon’s love of baking and the couples’ dedication to a vegan lifestyle.
They started Cinnaholic, a bakery business that serves gourmet, vegan cinnamon rolls that are dairy-free, egg-free, cholesterol-free, and incredibly delicious! To top it off, they added to the experience by offering over 50 flavorful frostings and specialty toppings, giving the customer the ability to create their very own gourmet, custom cinnamon roll.
Dessert Franchise Industry Analysis
Franchise Strengths
Great brand awareness from Shark Tank Episode
• The product is 100% dairy AND egg free – vegan
• High margins, low cost of goods
• Solid retail sales performance
• Easy preparation and production of product
• Small footprint and efficient design optimizes service speed
• Optimal business for multi-unit operator
• Focused line of bakery products, makes training simple
• Financing available through 3rd party lenders
Franchise Weaknesses
- Success of business is highly dependent on location of the store
- Solid corporate store financials but relatively new to franchising
- Highly priced products
Dessert Franchise Opportunities
- Ability to adapt and grow with an emerging franchisor in an under-penetrated market
- Opportunities for B2B business, coffee sales, etc.
- 39% of the American population is trying to have a plant-based diet1
- Consumers are becoming more health-conscious when making their dietary decisions
- According to the latest research from Nielsen
Threats in the Dessert Franchise Market
- Profitability can be negatively impacted by close location of like competitors
- Potential for change to consumer tastes and preferences
Cinnaholic Franchise Cost
Cinnaholic Franchise Cost Ranges from $187,000 to $368,500 – According to the 2020FDD
| Cost Types | Amount (in USD) | When Due | To Whom Payment is to Be Made | |
| Low | High | |||
| Initial Franchise Fee | $39,000 | $39,000 | Upon signing franchise agreement | Franchisor |
| Rent | 5,000 | 10,000 | Before Opening | Contractors; Approved Suppliers |
| Security Deposit | 3,000 | 6,000 | As arranged | Approved suppliers |
| Real Estate and Improvements | 75,000 | 150,000 | Before Opening | Suppliers |
| Travel and Living Expenses while Training | 3,000 | 10,000 | Before Opening | Third-party providers |
| Furnishings, Fixtures, Equipment and Decorating | 25,000 | 70,000 | As incurred | Franchisor and Approved Suppliers |
| Signage | 3,000 | 7,500 | As incurred | Landlord |
| Opening Inventory | 3,000 | 5,000 | As incurred | Utility Providers |
| Computer Hardware / Software | 1,000 | 2,000 | As incurred | Insurance companies |
| Grand Opening | 5,000 | 7,000 | As incurred | Airlines, hotels, restaurants |
| Professional Fees | 4,000 | 15,000 | Before Opening | Suppliers, Media |
| Insurance | 1,000 | 2,000 | As agreed | attorneys; accountants |
| Miscellaneous Opening Costs | 5,000 | 15,000 | Before Opening | Licensing authorities |
| Additional Funds – 3 months | 15,000 | 30,000 | Before Opening | Third-party providers |
| Total | $187,000 | $368,500 |
| Royalty | Ad-Fund |
| 5% | 2% |
FDD Disclosure:
“The data in this Item 19 predates the worldwide COVID-19 pandemic. The impacts of the COVID-19pandemicincludetheneedfor: social distancing, greater sanitization procedures; governmental orders or recommendations for all or certain types of persons to stay at home; infected persons to be subject to quarantine; certain industries like restaurants, food service establishments and other places where groups of people congregate, to temporarily or indefinitely suspend or modify operations; and the like.
We currently have no plans to approve the opening of any franchised unit while stay at home orders or recommendations are in effect, or while recommended or required business closures for our, or our system’s primary customers industries, are in effect in a given area. We do not know how long the COVID-19 pandemic will last. And, we currently do not have the ability to project what the longer term impacts of the COVID-19 pandemic will have with respect to the future performance of activities for our franchisees or how their future performance will compare to the data shown in this Item 19.”
Historical Annual Revenue for the Year Ending December 31, 2019 for all Cinnaholic Units Operating the Full twelve Months of 2019
| Cinnaholic Units | Annual Revenue |
|---|---|
| California – Berkley | $357,639.56 |
| California – LA/Echo Park | $277,011.79 |
| California – Tustin/The District at Tustin Legacy | $181,380.48 |
| Georgia – Atlanta (Edgewood) | $458,005.83 |
| Maryland – Baltimore/Rotunda | $263,953.46 |
| Nevada – Las Vegas (Blue Diamond) | $253,816.18 |
| Nevada – Las Vegas (Summerlin) | $305,851.49 |
| Ohio – Westlake | $185,080.72 |
| Tennessee – Knoxville | $426,800.24 |
| Texas – Southlake | $213,824.56 |
| Washington – Seattle/Capitol Hill | $521,992.27 |
Franchises Available
| California – Available | Connecticut – Available | Florida – Available | X – Hawaii |
| Illinois – Available | Indiana – Available | Kentucky – Available | Maryland – Available |
| Michigan – Available | X – Minnesota | X – Nebraska | New York – Available |
| X – North Dakota | X – Rhode Island | Canada – available | X – South Dakota |
| Texas – Available | Utah – Available | Virginia – Available | Washington – Available |
