How will Auntie Annes manage the Ad Fund?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
ions to the Ad Fund in a separate account from our other money. Our Shops will contribute to the Ad Fund in the same manner and in the same amounts as similarly-situated franchised Shops. Our other franchisees may not be required to contribute to the Ad Fund, may be required to contribute to the Ad Fund at a different rate than you, or may be required to contribute to a different advertising fund.
We or an affiliate will administer the Ad Fund. We have sole authority to direct all advertising programs and promotions and uses of the Ad Fund, with sole control over the creative concepts, materials, and media used in the programs, and the placement and allocation of advertising. We reserve the right to use any media, create any programs, and allocate advertising and promotional expenditures to any regions or locales we deem appropriate.
We may use the Ad Fund to meet the costs of administering, preparing, and conducting national, local, or regional advertising, promotional, or brand building programs of any kind, including the cost of (i) preparing and conducting television, radio, magazine, newspaper, and digital advertising campaigns and other public relations activities (including, but not limited to, for purposes of brand reputation management), (ii) employing public relations firms and advertising agencies to assist in these activities, and (iii) conducting other activities that are directly or indirectly designed to promote the System, its franchisees, and/or increase System sales, such as limited-time menu offerings, crew incentives, franchisee incentive and/or promotional programs, customized materials (e.g., cups), up-sell programs, guest response programs, manager/employee recognition programs, quality assurance and food safety programs, mystery shop and shopper programs, brand websites and ordering platforms, brand applications, social media account administration and promotion, and in-store equipment and technologies related to such marketing programs. We may use the Ad Fund to compensate us for the reasonable administrative costs and overhead we incur in activities related to advertising and promotional programs, including new product development; market research; preparing advertising and promotional materials; Digital Marketing (as defined below); working with public relations firms, advertising agencies, advertising placement services, and creative talent; reimbursing franchisee advisory council meeting expenses; developing and maintaining, and paying third parties for the development and maintenance of, internet sites, applications, and other equipment and technologies related to marketing programs.
The advertising and promotions that we conduct are intended to maximize general public recognition and patronage of the System generally in the manner that we determine to be most effective. We reserve the right to use any media, create any programs, and allocate advertising and promotional expenditures to any regions or locales we deem appropriate. We will not spend the Ad Fund in a manner that (i) exclusively benefits our licensees that manufacture and sell Approved Products, if any, or (ii) is principally a solicitation for the sale of franchises.
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, the Ad Fund, which is supported by franchisee contributions, will be managed by Auntie Annes or one of its affiliates. Auntie Anne's has the sole authority to direct all advertising programs and promotions, including complete control over the creative concepts, materials, and media utilized. They also have the power to decide on the placement and allocation of advertising. Auntie Anne's reserves the right to use any media, create any programs, and allocate advertising and promotional expenditures to any regions or locales they deem appropriate.
The Ad Fund can be used to cover various costs related to advertising, promotional, or brand-building programs at the national, local, or regional level. These costs include preparing and conducting advertising campaigns across different media, employing public relations firms and advertising agencies, and conducting activities designed to promote the Auntie Anne's system and increase sales. The Ad Fund may also be used to compensate Auntie Anne's for reasonable administrative costs and overhead related to advertising and promotional programs, such as new product development, market research, and maintaining websites and other marketing-related technologies.
In Fiscal Year 2023, the Ad Fund expenditures were allocated as follows: 28% on media placement, 37% on production and agency fees, 9% on guest response programs and menu innovation projects, 25% on brand and category marketing expenses, and 1% on administrative expenses. While Auntie Anne's intends for the Ad Fund to be perpetual, they may terminate it after all contributions have been spent. The document states that Auntie Anne's is not required to have an independent audit of the Ad Fund completed. However, they will provide an annual summary of the Ad Fund's expenditures upon reasonable request but are not required to prepare financial statements for the Ad Fund.