What actions are considered injurious or prejudicial to the goodwill associated with the Marks and System of Auntie Annes?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
- O. Section 17.2 (Our Termination; No Opportunity to Cure) of the Agreement is amended by adding the following Section 17.2.M. and 17.2.N.:
- 17.2.M. If you operate a Concession Shop located in a Host Facility and you fail to comply with any of the terms of the Site Agreement or Site Agreement is terminated or (if it is your only Accepted Location) expires.
- 17.2.N. If you operate a Concession Shop located in a Host Facility and the Host Facility or the Host Facility's brand deteriorates in quality or reputation such that, in our sole judgment, our association with the Host Facility or the Host Facility's brand is damaging or may damage the Auntie Anne's brand or the Marks.
Source: Item 22 — CONTRACTS (FDD page 106)
What This Means (2024 FDD)
According to the 2024 Auntie Anne's Franchise Disclosure Document, if a franchisee operates a Concession Shop located in a Host Facility, the brand can be damaged if the Host Facility or the Host Facility's brand deteriorates in quality or reputation. In such cases, Auntie Anne's has the sole judgment to determine if the association with the Host Facility is damaging or may damage the Auntie Anne's brand or the Marks.
This stipulation primarily affects franchisees operating within another business, such as a mall or airport. If the reputation of that larger entity declines, Auntie Anne's can take action to protect its brand. This could mean the franchisee is forced to close the location if it is their only accepted location.
For a prospective franchisee, this highlights the importance of the location of their Auntie Anne's store. It is not just about foot traffic, but also about the reputation and stability of the host facility. This clause protects Auntie Anne's from negative associations stemming from its franchisees' locations, but it also places a risk on the franchisee if the host location declines in quality or reputation.