May other Auntie Annes franchisees be required to contribute to the Ad Fund at a different rate?

According to Auntie Annes's 2024 Franchise Disclosure Document, other franchisees may be required to contribute to the Ad Fund at a different rate. The document states that Auntie Annes's Shops will contribute to the Ad Fund in the same manner and in the same amounts as similarly-situated franchised Shops. However, it also clarifies that other franchisees may not be required to contribute to the Ad Fund, may be required to contribute at a different rate, or may be required to contribute to a different advertising fund altogether.

This means that the amount a franchisee contributes to the Ad Fund can vary. Currently, the contribution is 1.5% of Net Sales for Shops in Other Locations and 3% of Net Sales for Shops in Streetside Locations. These percentages are subject to change with notice from Auntie Annes, but the combined Advertising Contribution and Local Marketing Obligation will not exceed 5% of Net Sales.

For a prospective franchisee, this indicates that advertising costs can fluctuate based on the shop's location and any changes Auntie Annes implements. It is important to note that Auntie Annes has sole authority over advertising programs and the use of the Ad Fund, including creative concepts and media allocation. While the Franchise Advisory Council provides suggestions, Auntie Annes ultimately controls the advertising strategy. Franchisees should also be aware of the Local Marketing Obligation, which requires local advertising expenditures, and the potential for Advertising Cooperatives, which could involve additional payments determined by the cooperative's by-laws.