For an Auntie Annes co-branded franchise, which fees may both Auntie Annes and the Co-Branded Franchisor independently impose?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
D. Section 3 (Fees) is amended by adding the following as Section 3.8:
- 3.8. Collection of Fees for Co-Branded Franchises. We and the Co-Branded Franchisor may both independently impose the following fees in accordance with the terms of this Agreement and/or the Co-Branded Agreement (in other words, (a) we could charge the fee and the Co-Branded Franchisor could also separately charge the same fee or (b) we could charge the fee, even if the Co-Branded Franchisor does not do so): (i) the Renewal Fee; (ii) the Ordering Support Fee; (iii) fees related to Advertising Cooperatives, brand promotions, taxes and related
payments, conferences and programs, brand advisory councils, Transfers, gift card and loyalty programs, loyalty apps, online ordering, purchasing programs, supply chains, insurance policies, development deadline extensions, indemnification provisions, attorneys' fees, and the reinstatement of franchises; and (iv) any other fees that are brand-specific or relate to costs that may be separately incurred by us and/or the Co-Branded Franchisor. All other fees will be charged by (x) us or the Co-Branded Franchisor, but not both or (y) jointly by both us and the Co-Branded Franchisor (and split between the two of us).
Source: Item 22 — CONTRACTS (FDD page 106)
What This Means (2024 FDD)
According to Auntie Annes' 2024 Franchise Disclosure Document, for co-branded franchises, both Auntie Annes and the Co-Branded Franchisor have the right to independently impose certain fees. This means that Auntie Annes could charge a specific fee, and the Co-Branded Franchisor could also charge the same fee separately. Alternatively, Auntie Annes could charge a fee even if the Co-Branded Franchisor chooses not to.
The fees that both Auntie Annes and the Co-Branded Franchisor can independently impose include the Renewal Fee, the Ordering Support Fee, and fees related to Advertising Cooperatives. Additionally, fees associated with brand promotions, taxes and related payments, conferences and programs, brand advisory councils, Transfers, gift card and loyalty programs, loyalty apps, online ordering, purchasing programs, supply chains, insurance policies, development deadline extensions, indemnification provisions, attorneys' fees, and the reinstatement of franchises can be independently imposed by either party. Any other fees not listed will be charged either by Auntie Annes or the Co-Branded Franchisor, but not both, or jointly by both parties and split between them.
This arrangement provides Auntie Annes with the flexibility to manage various aspects of the franchise relationship and ensure that necessary costs are covered. For a prospective franchisee, this means understanding that certain fees could potentially be doubled, as both Auntie Annes and the co-branding partner have the right to charge them independently. It is important for franchisees to carefully review the franchise agreement and any co-branding agreements to fully understand the fee structure and potential financial obligations.