What constitutes a 'Transfer' of an Auntie Annes franchise according to the agreement?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
Notwithstanding the foregoing, you acknowledge and agree to install a separate point of sale system approved by us.
- M. Section 12.10 (Hours of Operation) of the Agreement is deleted in its entirety.
- N. Sections 16.3.K. (Control Transfer), 16.4 (Non-Control Transfers), 16.5 (Related Party Transfers), and 18.2.D. (Reinstatement Fee) of the Agreement are revised to replace each instance of "then-current Initial Franchise Fee" with "then-current Initial Franchise Fee for a Concession Shop."
- O. Section 17.2 (Our Termination; No Opportunity to Cure) of the Agreement is amended by adding the following Section 17.2.M. and 17.2.N.:
- 17.2.M. If you operate a Concession Shop located in a Host Facility and you fail to comply with any of the terms of the Site Agreement or Site Agreement is terminated or (if it is your only Accepted Location) expires.
- 17.2.N. If you operate a Concession Shop located in a Host Facility and the Host Facility or the Host Facility's brand deteriorates in quality or reputation such that, in our sole judgment, our association with the Host Facility or the Host Facility's brand is damaging or may damage the Auntie Anne's brand or the Marks.
Source: Item 22 — CONTRACTS (FDD page 106)
What This Means (2024 FDD)
The 2024 Auntie Anne's Franchise Disclosure Document (FDD) does not explicitly define what constitutes a 'transfer' of a franchise within the provided excerpts. However, it does reference sections of the Franchise Agreement that address different types of transfers.
Specifically, Section N of Item 22 mentions revisions to "Sections 16.3.K. (Control Transfer), 16.4 (Non-Control Transfers), 16.5 (Related Party Transfers), and 18.2.D. (Reinstatement Fee) of the Agreement." These sections are revised to replace instances of "then-current Initial Franchise Fee" with "then-current Initial Franchise Fee for a Concession Shop."
Because the FDD excerpts do not provide the full definitions of 'Control Transfer,' 'Non-Control Transfer,' or 'Related Party Transfer,' prospective franchisees should carefully review the complete Franchise Agreement and ask Auntie Anne's for clarification on what each of these terms specifically entails. Understanding the conditions and requirements for each type of transfer is crucial before entering into a franchise agreement.