Is the Advertising Contribution paid to Auntie Annes in addition to the Grand Opening Obligation?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
ise fee as specified in Schedule A (the "Initial Franchise Fee"). When we sign this Agreement, the Initial Franchise Fee is fully earned and nonrefundable. You acknowledge that we have no obligation to refund any portion of the Initial Franchise Fee to you, even if this Agreement is terminated prior to opening the Franchised Business.
3.2 Ongoing Fees.
- A. Royalty Fee. You must pay to us a recurring, non-refundable royalty fee in the amount and at the
Source: Item 22 — CONTRACTS (FDD page 106)
What This Means (2024 FDD)
According to Auntie Annes's 2024 Franchise Disclosure Document, the Advertising Contribution is indeed separate from and in addition to the Grand Opening Obligation. This means franchisees must budget for both expenses independently. The Advertising Contribution is a recurring fee, while the Grand Opening Obligation is a one-time expense related to the store's launch.
The Grand Opening Obligation requires franchisees to spend a specified amount on advertising within a defined period around the store's opening. For other locations, this obligation is at least $2,500 to $5,000, while for streetside locations, it is at least $7,500 to $15,000. The Advertising Contribution, on the other hand, is an ongoing fee calculated as a percentage of net sales.
Furthermore, the FDD clarifies that the Advertising Contribution is also separate from the Local Marketing Obligation. The combined Advertising Contribution and Local Marketing Obligation cannot exceed 5% of the net sales of the franchised business. This structure allows Auntie Annes to maintain a consistent brand image and marketing strategy while also ensuring franchisees invest in local promotion.