Is an Auntie Annes franchisee required to participate in promotional campaigns established by Auntie Annes or their Advertising Cooperative, and who bears the costs?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
vertising Cooperative (if any) may establish temporary or permanent promotional campaigns (e.g., limited time offers, gift cards, coupons, loyalty programs, customer relationship management, and other supplemental marketing programs) applicable to the System as a whole or to specific advertising market areas. You are required to participate in these promotional programs at your own cost,
including the costs to purchase, lease and install all materials necessary to the promotional campaigns, including counter cards, posters, banners, signs, photographs, give-away items, and gift cards.
E. Local Marketing Obligation.
- (i) Local Marketing. Unless otherwise specified in Schedule A, you must aggressively advertise, market, and promote your Franchised Business locally in accordance with our Standards and must spend a reasonable amount each calendar quarter for local market advertising. If we require you to spend a minimum amount on local market advertising, we will specify the minimum amount in Schedule A (the "Local Marketing Obligation") and, upon our request, require you to submit for our written approval an annual local marketing plan. We may change the Local Marketing Obligation, provided that we must give you at least 60 days' written notice of the change. Your Local Marketing Obligation will be in addition to amounts you must pay or spend under Section 3.2.B (Advertising Contribution) and for the Grand Opening Obligation under Section 10.1.C. (Grand Opening Advertising). You will be responsible for determining the amount of advertising funds you spend for individual local market advertising, subject to the Local Marketing Obligation (if any) and our approval of your annual local marketing plan, if applicable.
Source: Item 22 — CONTRACTS (FDD page 106)
What This Means (2024 FDD)
According to Auntie Annes' 2024 Franchise Disclosure Document, franchisees are generally required to participate in advertising and promotional activities, with the specific requirements varying. Auntie Annes franchisees must aggressively advertise, market, and promote their franchised business locally, spending a reasonable amount each calendar quarter. This is known as the Local Marketing Obligation. The specific minimum amount, if any, will be detailed in Schedule A of the Franchise Agreement.
Auntie Annes may also require franchisees to participate in local, regional, or national advertising cooperatives. If Auntie Annes collects the entire Local Marketing Obligation from a franchisee, that franchisee will not be required to participate in an Advertising Cooperative. Franchisees are responsible for determining the amount of advertising funds they spend for individual local market advertising, subject to any Local Marketing Obligation and approval of their annual local marketing plan, if applicable.
The franchisee bears the costs associated with these campaigns, including purchasing or leasing materials like counter cards, posters, and signs. Failure to comply with local advertising expenditure requirements can result in Auntie Annes spending the required amount on advertising for the franchisee, who must then reimburse Auntie Annes for these expenses. Delinquency in payments or failure to abide by agreements with an Advertising Cooperative is considered a material breach of the Franchise Agreement.