Can Auntie Annes increase the Advertising Contribution?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
We may increase the Advertising Contribution by notice to franchisees. However, your required Advertising Contribution and Local Marketing Obligation will collectively not exceed 5% of your Net Sales. Your Advertising Contribution is in addition to your Local Marketing Obligation and your Grand Opening Obligation (as defined below).
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 61–77)
What This Means (2024 FDD)
According to Auntie Annes's 2024 Franchise Disclosure Document, Auntie Annes has the ability to increase the Advertising Contribution paid by franchisees. The document states that Auntie Annes may increase this contribution by providing notice to franchisees. Currently, the Advertising Contribution is 1.5% of Net Sales for Shops in Other Locations and 3% of Net Sales for Shops in Streetside Locations.
However, there is a limit to how much Auntie Annes can increase the Advertising Contribution. The document specifies that the total of the Advertising Contribution and the Local Marketing Obligation cannot exceed 5% of the franchisee's Net Sales. This provides a cap on the combined advertising expenses that Auntie Annes can mandate.
For a prospective franchisee, this means that while Auntie Annes controls the Advertising Contribution, there is a limit to how high it can be raised. The franchisee also needs to factor in the Local Marketing Obligation, as both contributions combined cannot exceed 5% of Net Sales. This is an important consideration for budgeting and financial planning when evaluating an Auntie Annes franchise.