What is the definition of a 'Remodel' for an Auntie Annes franchise, according to the FDD?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
with our then-current Standards and directives, refresh, refurbish, and renovate the Franchised Business to meet our then-current operational and branding Standards (a "Refresh"). Generally, a Refresh will require you to add, update, and/or replace components of the Franchised Business (including merchandising elements, graphics, paint or wall coverings, menu boards, interior and exterior signage, kitchen equipment, drive-thru equipment, Computer System components, and other furniture, fixtures, equipment, and décor that we may specify in our sole discretion) to meet our then-current Standards without significantly altering your Franchised Business' layout or structure.
- B. Remodel. Within six months after the tenth and (if you are entering into a Renewal Term) twentieth anniversaries of the Opening Date, you must, at your sole expense and in accordance with our then-current Standards and directives, remodel, refurbish, renovate, and modernize the Franchised Business to meet our then-current operational, branding, and architectural design Standards (a "Remodel"). Generally, a Remodel may include all of the modifications, upgrades, and replacements required in a Refresh, plus other more extensive alterations to your Franchised Business' layout, structure, or design, such as redesigning the interior and exterior appearance and interior layout of the Franchised Business or adding a drivethru to a Franchised Business.
- C. Process for Refreshes and Remodels. Before you begin a Refresh or a Remodel, we, our affiliate, or our designee will in-person or virtually inspect your Franchised Business and produce a site survey and/or design plan that will comply with our then-current Standards. We may require you to pay us, our affiliate, or our designee a reasonable fee for producing such site survey and/or design plan.
Source: Item 22 — CONTRACTS (FDD page 106)
What This Means (2024 FDD)
According to Auntie Annes's 2024 Franchise Disclosure Document, a "Remodel" involves significant changes to the franchise location. Specifically, franchisees must remodel, refurbish, renovate, and modernize their franchised business within six months after the tenth and (if applicable for a Renewal Term) twentieth anniversaries of the Opening Date. This must be done at the franchisee's sole expense and in accordance with Auntie Annes's then-current standards and directives.
The FDD states that a Remodel generally includes all modifications, upgrades, and replacements required in a "Refresh," along with more extensive alterations. These alterations can affect the layout, structure, or design of the franchised business. Examples include redesigning the interior and exterior appearance and interior layout, or even adding a drive-thru.
Before starting a Remodel, Auntie Annes, its affiliate, or its designee will inspect the franchised business in person or virtually to produce a site survey and/or design plan that complies with their current standards. The franchisee may be required to pay a reasonable fee for this service. All plans, designs, furniture, fixtures, equipment, and décor must be approved in writing by Auntie Annes and conform to their standards and applicable laws. If required, these items must be purchased from approved suppliers.
The FDD emphasizes that a Remodel may require a significant capital investment from the franchisee. The franchisee agrees to incur all necessary capital expenditures to comply with these requirements, even if those expenditures cannot be amortized over the remaining term of the franchise agreement. Additionally, franchisees must comply with specific sections of the franchise agreement related to leasehold improvements, architectural plans, and construction, inspection, and government approvals for each Remodel.