Is Auntie Annes obligated to conduct any advertising?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
ate your Shop in accordance with the site selection criteria provisions described above in this Item. (Franchise Agreement, Section 5.5)
- 8. Remodeling Review. We will review and approve or disapprove your general contractor and proposed replacement designs, furniture, fixtures, equipment, and décor when you refresh or remodel your Shop. (Franchise Agreement, Section 12.6)
Advertising
Our Advertising. We are not obligated to conduct any advertising. We may periodically formulate, develop, produce, and conduct, at our sole discretion, advertising or promotional programs in such forms and media as we determine to be most effective. We may make available to you for you to purchase approved advertising and promotional materials, including signs, posters, collaterals, etc. that we have prepared.
Ad Fund. We will allocate your Advertising Contributions to a fund for the advertising and promotion of the Shops, the Proprietary Marks, and the System (the "Ad Fund"). Currently, you must make a monthly Advertising Contribution to the Ad Fund in the amount of 1.5% of Net Sales for Shops located in Other Locations and 3% of Net Sales for Shops located in Streetside
Locations.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 61–77)
What This Means (2024 FDD)
According to Auntie Anne's 2024 Franchise Disclosure Document, Auntie Anne's is not obligated to conduct any advertising. However, Auntie Anne's may choose to create and conduct advertising or promotional programs. Auntie Anne's may also offer franchisees the option to purchase approved advertising and promotional materials.
Auntie Anne's allocates advertising contributions to the Ad Fund, which is used for advertising and promoting the shops, proprietary marks, and the system. Franchisees must contribute to the Ad Fund, with the amount being 1.5% of Net Sales for shops in Other Locations and 3% of Net Sales for shops in Streetside Locations. Auntie Anne's has the right to increase this contribution with notice, but the combined Advertising Contribution and Local Marketing Obligation will not exceed 5% of Net Sales.
Although Auntie Anne's is not obligated to conduct advertising, franchisees are required to spend a minimum amount on local market advertising, which is currently 1% of Net Sales each calendar quarter to satisfy the Local Marketing Obligation. Franchisees must also spend a minimum amount on grand opening advertising, which ranges from $2,500 to $7,500 depending on the location type, or pay that amount to Auntie Anne's or the Ad Fund to handle the grand opening advertising. This means that while Auntie Anne's itself has no obligation to advertise, franchisees are required to invest in both local and grand opening advertising efforts.