What are the consequences if an Auntie Annes franchisee fails to open by the Opening Deadline?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
rity of violations, number of violations, and | On invoice | Payable if you fail to comply with any of the Standards, in addition to any other remedies that we are entitled to pursue. The fee may be charged repeatedly (as frequently as daily) if the non-compliance is ongoing. |
| Type of Fee1, 3 | Amount | Date Due | Remarks |
|---|---|---|---|
| repetition of | |||
| violations | |||
| Failure to Comply with Standards or Law Fee | Up to a $5,000 fee plus our reasonable expenses connected with any inspection, examination, or analysis of products or your Shop | On invoice | Payable if our inspection shows the products have been adulterated in any way or that your Shop does not comply with applicable laws. If (i) we inspect your Shop and find a violation and we find the same violation at another inspection within one year, (ii) you fail to comply with any remedial measures we require, (iii) you fail to cooperate in any inspection, or (iv) there have been repeated violations, then you must pay up to a $5,000 fee for the inspection, in addition to the travel expenses of our inspectors or representatives and any other expenses we incur, including attorneys' fees. These remedies are not exclusive. |
| Development Deadline Extension Fee | $2,500 per missed deadline | On invoice | Payable if you fail to meet the Site Approval Deadline, Construction Start Deadline, or Opening Deadline (each as defined in Item 11) or if we grant you an extension to any of these deadlines. We may terminate the Franchise Agreement if you fail to open by the Opening Deadline or if you fail to cure a default of the Site Approval or Construction Start Deadlines. |
| Repeated Inspection Fee | $500 Non compliance Fee, plus any costs we are charged by third-party inspectors or otherwise incur | On invoice | If we or our representative inspect you as a result of your repeated or continuing failure to comply with any provision of the Franchise Agreement, you must pay us the cost of the inspection, including the travel and living expenses of our representatives. |
| Audit | Cost of audit | On invoice | If we audit you and find that you understated |
| Net | |||
| Sales | |||
| by | |||
| 2% | |||
| or | |||
| more, | |||
| you | |||
| must | |||
| reimbur |
Source: Item 6 — OTHER FEES (FDD pages 30–44)
What This Means (2024 FDD)
According to Auntie Annes's 2024 Franchise Disclosure Document, a franchisee may face financial penalties and potential termination of their Franchise Agreement if they fail to meet certain deadlines. Specifically, if a franchisee misses the Site Approval Deadline, Construction Start Deadline, or Opening Deadline, they will be charged a Development Deadline Extension Fee of $2,500 per missed deadline. This fee is payable upon invoicing.
Furthermore, Auntie Annes retains the right to terminate the Franchise Agreement if the franchisee fails to open their store by the Opening Deadline. The franchisor can also terminate the agreement if the franchisee fails to address and resolve any defaults related to the Site Approval or Construction Start Deadlines.
These stipulations highlight the importance of adhering to the development schedule outlined in the franchise agreement. Prospective Auntie Annes franchisees should carefully review these deadlines and ensure they have a realistic plan for site selection, construction, and opening to avoid incurring fees or risking termination of their franchise agreement.