What is the amount of the security deposit required by Auntie Annes for the SRU lease agreement?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
ssor's designee.
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- Term. This Agreement shall be effective and binding from the date of execution and shall terminate upon the earlier of (i) the expiration or termination of the Lease Agreement; (ii) the expiration or termination of the Franchise Agreement and/or SRU Addendum; or (iii) the termination of this Agreement pursuant to Section 14 below.
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- Lessee Obligations. Lessee must provide Lessor with the following items:
- a. Lease Agreement. A copy of the signed Lease Agreement or a letter of approval from the Landlord for the operation of the SRU for a minimum term of two (2) months shall be delivered the Lessor upon execution of this Agreement. Lessor does not guarantee that
Source: Item 22 — CONTRACTS (FDD page 106)
What This Means (2024 FDD)
According to Auntie Annes's 2024 Franchise Disclosure Document, a franchisee is required to pay a security deposit for the Satellite Retail Unit (SRU) lease agreement. Upon execution of the agreement, the franchisee (Lessee) must provide a $1,000 non-interest bearing deposit to the franchisor (Lessor).
The security deposit is held by Auntie Annes to cover any potential costs incurred during the lease. Specifically, the document states that the security deposit will be used to offset any remaining dues under the agreement, return shipping costs, and repair or replacement costs for any lost or damaged items.
After the SRU is returned and fully inspected, Auntie Annes will return the remaining security deposit to the franchisee within 30 days, assuming all necessary repairs have been completed. However, if the repair costs exceed the $1,000 security deposit, the franchisee is responsible for covering the difference.