Can Auntie Annes or its affiliates establish franchises or company-owned businesses offering similar products near an Auntie Annes franchisee's location?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
11. Section 4.1 (Reserved Rights): The following provisions are added to Section 4.1 of the Agreement.
[For Streetside Locations:]
A. Area of Protection. We grant you a protected territory in which you have certain limited exclusive rights (an "Area of Protection"). [Your Area of Protection is: a . mile [OR
block] radius from the Accepted Location with the Accepted Location as the center point.] [OR] [We will designate, in our sole discretion, your Area of Protection after we accept the Proposed Location as the Accepted Location. When we designate the Area of Protection for the Franchised Business, you must sign standard documentation we prepare, which includes a general release, to document the Area of Protection.] If you relocate the Franchised Business pursuant to Section 5.5 (Relocation of the Franchised Business), we will specify an Area of Protection for the new location.
Source: Item 22 — CONTRACTS (FDD page 106)
What This Means (2024 FDD)
According to Auntie Anne's 2024 Franchise Disclosure Document, the franchisor grants a protected territory to franchisees for streetside locations. The size and terms of this protected area are defined in the franchise agreement.
For a streetside Auntie Anne's location, the franchisee is granted an Area of Protection, which provides limited exclusive rights within that territory. The Area of Protection is defined as either a specified mile or block radius from the Accepted Location. The franchisor retains the discretion to designate the Area of Protection after the Proposed Location is accepted. The franchisee is required to sign standard documentation, including a general release, to formally document the Area of Protection.
If a franchisee relocates their Auntie Anne's business, the franchisor will specify a new Area of Protection for the relocated business. This indicates that the protected territory is tied to the specific location of the franchise and can be adjusted if the location changes. It is important for prospective franchisees to understand the specific terms and conditions related to the Area of Protection, as it directly impacts the geographic area where they can expect to operate without direct competition from other Auntie Anne's locations.